General Nature of a Partnership – MCQ on Business Law with Answers

Students should practice General Nature of a Partnership – CA Foundation Business Law MCQ Questions with Answers based on the latest syllabus.

General Nature of a Partnership – Business Law MCQ Questions with Answers

1. What among the following is not an essential element of partnership:
(a) There must be an agreement entered into by all the persons concerned
(b) The agreement must be to share the profits of a business
(c) The business must start within six months from the date of agreement
(d) The business must be carried on by all or any one of them acting for all.
Answer:
(c) The business must start within six months from the date of agreement

2. A Joint Hindu Family is created:
(a) By a contract
(b) By operation of law or status
(c) By registration
(d) By all the above mode
Answer:
(b) By operation of law or status

3. A club is the form of:
(a) Association not for profit
(b) Partnership
(c) Sole proprietorship
(d) Public company.
Answer:
(a) Association not for profit

4. The Partnership Act, 1932 ________.
(a) Specifies the minimum number of partners in a firm
(b) Specifies the maximum number of partners in a firm
(c) Both (a) and (b)
(d) None of the above
Answer:
(a) Specifies the minimum number of partners in a firm

General Nature of a Partnership – MCQ on Business Law with Answers

5. The ceiling on maximum number of partners in a firm is laid down in:
(a) The Partnership Act, 1932
(b) The Indian Contract Act, 1872
(c) The Companies Act, 1956
(d) Central Government notification
Answer:
(c) The Companies Act, 1956

6. The test of partnership is laid down in the following case:
(a) Cox v. Hickman
(b) Garner v. Murray
(c) Mohiribibi v. Dharmodas Ghosh
(d) None of the above
Answer:
(a) Cox v. Hickman

7. A partnership firm ________.
(a) Is a legal person
(b) Is not a legal person
(c) Has a distinct legal personality
(d) None of the above
Answer:
(b) Is not a legal person

8. A partnership formed for the purpose of carrying on particular venture or undertaking is known as:
(a) Limited partnership
(b) Special partnership
(c) Joint Venture
(d) Particular partnership
Answer:
(d) Particular partnership

9. The principle of ________ is applicable to partners in a partnership:
(a) Uberrimae fidei/Utmost Good Faith
(b) Ultimate Trust
(c) Insurable Interest
(d) Blind Faith
Answer:
(a) Uberrimae fidei/Utmost Good Faith

10. Limited Liability partnership is a form of partnership that:
(a) Is not possible
(b) Is allowed in certain circumstances in the Partnership Act, 1932
(c) Is now abolished
(d) Can be set up by LLP Act, 2008
Answer:
(d) Can be set up by LLP Act, 2008

General Nature of a Partnership – MCQ on Business Law with Answers

11. A partnership for which no period or duration is fixed under the Indian Partnership Act is known as :
(a) Unlimited partnership
(b) Co-ownership
(c) Particular partnership
(d) Partnership at will
Answer:
(d) Partnership at will

12. The essential elements of partnership does not include:
(a) Partnership should be registered
(b) There must bean agreement to share profits of a business.
(c) There must be mutual agency among partners.
(d) There must be an association of two or more persons.
Answer:
(a) Partnership should be registered

13. To form a partnership, the minimum capital contribution should be:
(a) ₹ 1 lakh
(b) ₹ 10 lakh
(c) ₹ 1 crore
(d) There is no minimum limit.
Answer:
(d) There is no minimum limit.

14. Property of firm does not include:
(a) All property which the partners have originally brought into the common stock of the business
(b) Goodwill of the business
(c) Personal properties belonging to the partner
(d) Property acquired by the funds of the firm
Answer:
(c) Personal properties belonging to the partner

15. Which of the parties may be admitted to the benefits of partnership?
(a) Person of unsound mind
(b) Minor
(c) Alien enemies
(d) An insolvent.
Answer:
(b) Minor

General Nature of a Partnership – MCQ on Business Law with Answers

State Whether The Following are True or False:

  1. Maximum number in a partnership firm is 50 members.
  2. A partnership firm cannot be registered for carrying on any charitable activity.
  3. The maximum number of partners in a partnership firm is specified in Companies Act, 2013.
  4. Sharing of profits is the conclusive evidence of the existence of the partnership between the parties.
  5. A minor can be a partner in a partnership firm.
  6. A and B agree to buy 100 tins of ghee agreeing to share it between them. They are not partners.
  7. If a partnership can be dissolved by the mutual agreement only, then it will be called as a partnership at will.
  8. Forming a partnership for construction of a bridge is a type of particular partnership.
  9. Goodwill is to be considered as a partnership property.
  10. Prior to the enactment of Indian Partnership Act, 1932 the law relating to partnership was contained in the Indian Contract Act, 1872.
  11. True test of partnership was first laid down in the case of Cox v. Hickman.
  12. A sub-partner has a right to participate in the conduct of the business.
  13. Law of partnership is an extension of the general law of guarantee.
  14. Partnership firm has a separate legal entity.

Answer:

  1. True
  2. True
  3. True
  4. False
  5. False
  6. True
  7. False
  8. True
  9. True
  10. True
  11. True
  12. False
  13. False
  14. False

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