Partnership Act - Part 4

53 Questions | By Sweetsalman123 | Last updated: Mar 20, 2022 | Total Attempts: 441

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Questions on : 1)Introduction and Authority of a Partner. 2)Implied Authority of a Partner. 3)Liabilities of a Firm and its Partners to a Third Party. 4)Reconstituion of a Firm. __________________________________________________ No. Of Questions to be Answered : Random 20 out of 53

Questions and Answers

1.

The liability of the partners in a firm is
- A.
  
  Limited
- B.
  
  Unlimited
- C.
  
  Joint and several
- D.
  
  Both (b) and (c).
2.

The liability of a partner is only for the 'acts of the firm' which are done while he is a partner.
- A.
  
  True, Section 25 of the Indian Partnership Act makes specific provision in this regard.
- B.
  
  False, as these is no term like 'act of the firm' in the Indian Partnership Act
3.

An act or omission by all the partners or by any partner or by firm's agent which gives rise to a right enforceable by or against the firm, is known as an
- A.
  
  Act of partners
- B.
  
  Act of firm
- C.
  
  Authorised act
- D.
  
  Actual act
4.

An act of a partner done by him in the usual course business, is an act of the firm.
- A.
  
  True
- B.
  
  False
5.

The firm is bound by the act of a partner which are done by firm within the scope of his
- A.
  
  Express authority
- B.
  
  Implied authority
- C.
  
  Both (a) and (b)
- D.
  
  Only (a).
6.

A firm is bound by the acts of a partner over if these are done without any express authority.
- A.
  
  True, if such acts are within the scope of implied authority.
- B.
  
  False, as acts without express authority are void.
7.

A firm is bound by an act of a partner only if is done by him in
- A.
  
  His own name
- B.
  
  Firm's name
- C.
  
  Managing partner's name
- D.
  
  None of these.
8.

The scope and concept of partner's implied authority is contained in which of the following section of the Indian Partnership Act ?
- A.
  
  Section 18
- B.
  
  Section 19
- C.
  
  Section 20
- D.
  
  Section 22
9.

An act of a partner to borrow money is within the scope of his implied authority in case of
- A.
  
  Trading business
- B.
  
  Non-trading business
- C.
  
  Both of these
- D.
  
  None of these
10.

Which of the following acts are within the implied authority of a partner?
- A.
  
  To engage a lawyer and defend the action brought against the firm.
- B.
  
  To purchase goods of the kind used in firm's business.
- C.
  
  To engage servants to perform the business of the firm.
- D.
  
  All of these.
11.

Which of the following acts are not included in the implied authority of a partner?
- A.
  
  To enter into partnership on behalf of the firm.
- B.
  
  To borrow money for the purposes of business.
- C.
  
  To settle accounts with the persons dealing with the firm.
- D.
  
  To buy or sell goods on account of partnership.
12.

Which of the following act has not been statutorily excluded form the scope of implied authority of a partner?
- A.
  
  To withdraw a suit or proceedings filed on behalf of the firm.
- B.
  
  To submit a dispute, relating to the business of the firm, to arbitration.
- C.
  
  To receive payment of the debts due to the firm and give receipt for the same.
- D.
  
  To acquire or transfer immovable property on behalf of the firm
13.

A partner has implied authority to open a bank account, on behalf of the firm, in his own name.
- A.
  
  True, as it is necessary for conducting the business affairs of the firm.
- B.
  
  False as it has been excluded form the scope of implied authority under Section 19(2).
14.

A partner has implied authority to
- A.
  
  Compromise any claim by the firm
- B.
  
  Relinquish any claim by the firm
- C.
  
  Admit any liability in a suit against the firm
- D.
  
  None of these.
15.

The implied authority of the partners may ' be restricted by an agreement between them.
- A.
  
  True, Section 20 makes a specific provision in this regard.
- B.
  
  False, as implied authority of a partner cannot be restricted by such agreements.
16.

If a person dealing with the firm has no knowledge of the express restrictions on partner's implied authority. Then for such restricted acts, the firm
- A.
  
  Shall be liable
- B.
  
  Shall not be liable
- C.
  
  Is non-existent
- D.
  
  Is a legal person.
17.

The firm is bound by an act of a partner done without any express or implied authority if such act is
- A.
  
  Done in emergency
- B.
  
  Done to protect the firm form loss- threatened by the emergency
- C.
  
  Reasonable in the circumstances
- D.
  
  All of the these.
18.

The firm is liable to third parties for wrongful act of a partner if the wrongful act is done
- A.
  
  In the ordinary course of business of the firm.
- B.
  
  With the authority of all other partners.
- C.
  
  Either (a) or (b).
- D.
  
  Both (a) and (b).
19.

The liability of the firm for wrongful acts of a partner is provided in ___________.
- A.
  
  Section 26
- B.
  
  Section 27
- C.
  
  Section 28
- D.
  
  None of these
20.

Where the money received form a third party by the firm, in the ordinary course of its business, is misapplied by one of the partners to his own use, then the
- A.
  
  Defaulting partner alone is liable for the same.
- B.
  
  Firm is liable for the same.
- C.
  
  Firm is not liable for the same.
- D.
  
  Third party has no remedy.
21.

The firm is liable to a third party for misapplication of third party's money or property by a partner to his own use, where the money or property is received by
- A.
  
  A partner and then misapplied by the same partner.
- B.
  
  The firm and then misapplied by any of the partner.
- C.
  
  Both of these.
- D.
  
  Only(a).
22.

The liability of the firm, for misapplication of third party's money or property by a partner to his own use, is provided in_____
- A.
  
  Sec 26
- B.
  
  Sec 27
- C.
  
  Sec 28
- D.
  
  Sec 29
23.

A person, even if he is not a partner in the firm, may be held liable as partner if he knowingly permits himself to be represented as a partner.
- A.
  
  True, as the principle of holding out applies in such a case.
- B.
  
  False, as a person can become a partner only by agreement not otherwise.
24.

The liability of a person, by the principle of holding out is provided in
- A.
  
  Section 25
- B.
  
  Section 26
- C.
  
  Section 27
- D.
  
  Section 28
25.

After retirement from firm, which of the following person is not liable by holding out, even if the public notice of retirement is not given ?
- A.
  
  Active partner
- B.
  
  Sleeping partner
- C.
  
  Representative of deceased partner
- D.
  
  Both (b) and (c)