Partnership Act - Part 4

53 Questions | Total Attempts: 376

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Partnership Act - Part 4

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)

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