Partnership ACT - Part 1

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The correct answer is "Agreement" because a partnership is formed when two or more individuals agree to come together and conduct a business with the intention of making a profit. This agreement outlines the rights, responsibilities, and obligations of each partner and establishes the terms of their partnership. Without an agreement, there can be no partnership.

The explanation for the given correct answer is that a partner is indeed the agent of the firm for the business of the firm. This is true because the concept of mutual agency is a fundamental principle in the law of partnership. Mutual agency means that each partner has the authority to act on behalf of the firm and bind it legally to contracts and obligations. This allows partners to make decisions and conduct business on behalf of the partnership. Therefore, the statement is true.

An active or ostensible partner is someone who becomes a partner through agreement and actively participates in the management and operations of the partnership business. They are involved in decision-making, contribute to the day-to-day activities, and have legal authority to bind the partnership. This type of partner is visible and known to the public and third parties.

A partnership at will is a type of partnership where there is no fixed duration or specific agreement in place. In such a partnership, any partner has the right to dissolve the firm at any time by giving a written notice expressing their intention to do so. This means that the partnership can be dissolved without the consent or agreement of the other partners. Therefore, the statement is true.

When a partnership is formed for a specific adventure or undertaking, it is expected to come to an end upon the completion of that particular venture. This means that once the goal or objective of the partnership is achieved, the partnership itself is dissolved. Therefore, the statement "A particular partnership comes to an end on the completion of a particular adventure or undertaking" is true.

A partnership formed for the purposes of carrying on business in general is known as a general partnership. In this type of partnership, all partners share equal responsibility and liability for the business's debts and obligations. They also have equal authority in making decisions and managing the business. This type of partnership is commonly formed when two or more individuals come together to start a business without the need for any formal legal agreements or specific business purposes.

A partnership can come into existence through either an express or an implied agreement between the partners. An express agreement refers to a formal agreement that is clearly stated and agreed upon by all parties involved. On the other hand, an implied agreement is not explicitly stated but can be inferred from the actions, conduct, or circumstances of the parties involved. Therefore, a partnership can be formed by either a clearly expressed agreement or by the implication of an agreement based on the actions and behavior of the partners.

A written agreement by which a Partnership firm is created is known as a Partnership Deed. This document outlines the terms and conditions of the partnership, including the rights and responsibilities of each partner, the profit-sharing ratio, capital contributions, and other important details. It serves as a legally binding contract between the partners and helps establish clarity and understanding among them. The Partnership Deed is essential for the smooth functioning and governance of the partnership firm.

A partnership deed is a legal document that outlines the terms and conditions of a partnership agreement. It typically includes the name of the firm and partners, the nature of the business, the duration of the partnership, the capital contributions of each partner, the profit/loss sharing ratio, and any other agreed-upon terms. Therefore, the correct answer is "All of these" as all of these particulars are typically included in a partnership deed.

In a partnership firm, there must be at least two partners. If the number of partners is reduced to one, it means that there is no longer a partnership as it requires a minimum of two individuals. Therefore, the firm is compulsorily dissolved in such a situation.

A partnership firm comes into existence by agreement. This means that the formation of a partnership requires a mutual agreement between two or more individuals to carry on a business together with the intention of making a profit. The agreement can be oral or written, and it outlines the rights, responsibilities, and obligations of each partner. This agreement is essential for the creation of a partnership firm and sets the foundation for the partnership's operations and governance.

In a partnership business, the name under which the business is carried on is referred to as the firm name. This name represents the collective identity of the partners and distinguishes the business from others. It is used for legal and business purposes, such as contracts, licenses, and banking transactions. The firm name helps to establish credibility and recognition in the market, making it an essential aspect of a partnership business.

When individuals enter into a partnership with one another, they are referred to as partners. In a partnership, two or more people come together to carry on a business and share the profits and losses. Therefore, the correct answer is "Partners".

An active partner who does not give a public notice of his retirement continues to be liable for the acts of the firm even after his retirement. This means that if the partner retires without informing the public, he is still legally responsible for any obligations or debts incurred by the firm. This is because without a public notice, the partner's retirement is not officially recognized, and therefore his liability remains intact.

A partnership firm is a business structure where two or more individuals come together to carry on a business with a view to making a profit. In the case of a partnership firm carrying on banking business, the maximum number of persons allowed should not exceed 10. This is because banking business involves handling sensitive financial transactions and requires a high level of trust and confidentiality. Having a smaller number of partners allows for better control and coordination within the firm, ensuring smooth operations and effective decision-making.

An agreement to carry on business at some future time does not result in a partnership unless that time arrives and the business is started. This means that simply having an agreement or intention to start a business in the future does not automatically create a partnership. The partnership only comes into existence when the agreed-upon future time arrives and the business is actually started. Therefore, the statement is true.

In a partnership business, the sharing of profits refers to the distribution of profits among the partners. However, it also implies that the partners are equally responsible for any losses incurred by the business. This means that if the partnership business suffers a loss, the partners are obligated to share the financial burden and contribute towards covering the losses. Therefore, the statement is true as sharing profits in a partnership also includes sharing losses.

A Partnership Firm can come into existence through either an express agreement or an implied agreement. An express agreement refers to a formal written or verbal agreement between all the partners, where they explicitly state their intention to form a partnership. On the other hand, an implied agreement refers to a situation where the actions and conduct of the parties involved indicate their intention to form a partnership, even if there is no formal written or verbal agreement. Therefore, a Partnership Firm can be formed by either an express or implied agreement between the partners.

The legal position of a firm is that it has no independent existence apart from its partners. This means that a firm is not considered a separate legal entity and its partners are personally liable for the firm's debts and obligations. In other words, the partners and the firm are one and the same in the eyes of the law. Therefore, the statement is true.

A company can become a partner in a partnership firm because it is considered a legal person and has its own separate existence. Unlike partnerships which are formed among natural persons, a company can enter into a partnership agreement and contribute to the firm's operations and profits. This allows for greater flexibility in business arrangements and enables companies to collaborate with other entities in a partnership structure.

In a partnership firm, each partner is considered as an agent of the firm. This means that each partner has the authority to act on behalf of the firm and bind it legally in business transactions. As agents, partners have the power to enter into contracts, make decisions, and represent the firm in dealings with third parties. This is a fundamental principle of partnership law, where partners are seen as representatives of the firm rather than employees or officers.

Partnership at will is the correct answer because it refers to a partnership where the duration of the firm is not fixed. In this type of partnership, the partners have not agreed upon a specific period for the partnership to exist. It can be dissolved at any time by any partner without prior notice. This type of partnership is common when partners do not have a written agreement or when the partnership is formed for a specific project or purpose with no long-term commitment.

All of these options are essential features of a partnership. An agreement is necessary for the formation of a partnership, as it outlines the terms and conditions that govern the partnership. Sharing of profits is a key characteristic of a partnership, as partners contribute capital and share in the profits and losses of the business. Mutual agency between partners means that each partner has the authority to act on behalf of the partnership and bind it legally. Therefore, all of these features are necessary for a partnership.

The statement is true because there is no mention of any business or commercial activity between A and B. They simply agreed to buy bags of rice and share them equally, which does not constitute a partnership.

Partnership is a business structure where two or more individuals agree to share the profits of a business. In this structure, all of the partners have the authority to act on behalf of the partnership, either individually or collectively. This means that any partner can make decisions and carry out business activities on behalf of all the partners. Therefore, the correct answer is "All of the partners or any of them acting for all."

The essential features of a partnership include the association of two or more persons, mutual agency between partners, and the absence of a separate legal entity. However, registration is not considered an essential feature of a partnership. Additionally, a partnership does not have a separate legal entity, meaning that the partnership and the partners are considered as one and the same. Therefore, the correct answer is (ii), (iv).

The correct answer is Partnership. A partnership is a business structure in which two or more individuals agree to share the profits and losses of a business venture. In this case, A and B have agreed to produce a film together and share the profits from hiring it out, which aligns with the definition of a partnership. Co-ownership and joint-ownership typically refer to shared ownership of a physical asset, such as property or a vehicle, and are not applicable in this context.

When there is no provision in the partnership deed regarding the dissolution of partnership, the firm is known as a "Partnership at will". This means that the partnership can be dissolved at any time without any specific reason or notice. In a partnership at will, partners have the freedom to dissolve the partnership whenever they wish, without any restrictions or conditions mentioned in the partnership deed. This type of partnership is formed when the partners do not have a specific term or duration mentioned in the partnership agreement.

The Indian Partnership Act, 1932, extends to the whole of India except Jammu & Kashmir. This means that the provisions of the Act apply to all states and union territories in India, except for Jammu & Kashmir which has its own separate laws governing partnerships.

A company can become a partner in a firm because it is considered a legal person. This means that a company has the legal capacity to enter into partnerships and engage in business activities. While partnerships are typically formed between natural persons, there is no legal restriction preventing a company from becoming a partner. Therefore, it is possible for a company to participate in a partnership with other individuals or entities.

A partnership can be created by an oral agreement, not just by a partnership deed. While a partnership deed is a written agreement that outlines the terms and conditions of the partnership, it is not the only way to establish a partnership. In some cases, a partnership can be formed through a verbal agreement between the partners, without any written documentation. However, it is always recommended to have a partnership deed in order to avoid any misunderstandings or disputes in the future.

All of the mentioned persons, including joint owners sharing profits, money-lenders receiving profits, and sellers of goodwill receiving profits, may receive profits from a firm but they are not considered as partners. Joint owners may share profits but may not have a formal partnership agreement. Money-lenders may receive profits as interest on loans, but they are not actively involved in the management of the firm. Sellers of goodwill may receive profits as part of the sale agreement, but they are not partners in the firm. Therefore, all of these options are correct.

Mutual agency is the true test of partnership because it refers to the authority given to each partner to act on behalf of the partnership and bind it legally. This means that each partner has the power to make decisions and enter into contracts that are binding on all partners. It is a fundamental aspect of partnership that distinguishes it from other forms of business organizations. Registration of firm, sharing of profits, and sharing of losses are also important elements of partnership, but they do not directly determine the true test of partnership.

A dormant or sleeping partner is someone who has invested in a partnership but does not actively participate in its day-to-day operations. In this scenario, the correct answer is true. Even if a dormant partner retires from the partnership without giving a public notice, they are not liable for any acts or obligations of the firm that occur after their retirement. This is because their status as a dormant partner means that they have limited liability and are not actively involved in the partnership's affairs.

A partnership at will is a type of partnership where its duration is not fixed and it can be dissolved at any time. This means that the partners can choose to end the partnership whenever they want without any specified time limit or mode of dissolution. Therefore, the correct answer is (i) and (iii).

If a firm continues to carry on some other adventure or undertaking after the completion of a particular one, it indicates that the partnership is not limited to a specific purpose or duration. This suggests that the partners have agreed to a partnership at will, where they can engage in any lawful business activity for an indefinite period of time. This type of partnership does not have any specific restrictions or limitations, allowing the partners to freely pursue new ventures as they see fit.

The correct answer is The Indian Contract Act, 1872. This is because prior to the passing of the Indian Partnership Act, 1932, the provisions relating to partnerships were contained in the Indian Contract Act, 1872. The Indian Contract Act, 1872 provides the legal framework for contracts in India, including the formation and enforcement of partnerships. Therefore, it is the most relevant legislation in this context.

The correct answer is 20 because there is no specific limit mentioned in the question for the maximum number of persons in a firm carrying on any business. Therefore, the maximum number can be any number, including 20.

Mutual agency is an important feature of a firm that distinguishes it from other similar associations. It refers to the authority given to each partner to act on behalf of the firm and bind it legally. This means that each partner has the power to enter into contracts, make decisions, and represent the firm in business transactions. Mutual agency allows for efficient decision-making and flexibility within the firm, as partners can act independently and collectively. It also implies that partners are responsible for each other's actions and liabilities, making it a crucial characteristic of a firm.

B is A's agent because B has been appointed by A to manage his entire work. As an agent, B will act on behalf of A and make decisions and carry out tasks on A's behalf. B will receive 50% of the profits as his remuneration, which is a common arrangement between an agent and a principal. Additionally, B will bear all the losses, which further indicates the agency relationship between A and B. Therefore, B is A's agent in this scenario.

A particular partnership refers to a partnership that is formed for the purpose of carrying out a specific adventure or undertaking. Unlike a general partnership, which is formed for a general business purpose, a particular partnership is focused on a specific project or goal. This type of partnership allows individuals or businesses to come together temporarily to collaborate on a specific venture, pooling their resources and expertise to achieve a common objective.

A person who represents himself to be a partner but in reality he is not so, is known as a "partner by holding out". This term refers to someone who falsely claims to be a partner in a business or partnership, even though they do not have any legal or official partnership status. They may deceive others by acting as if they have the authority and rights of a partner, when in fact they do not.

A partnership firm can be formed for either a long and permanent undertaking or a single business venture. The key requirement is that there must be some business involved. Therefore, any of these two options can be considered as the correct answer.

When a partnership continues to carry on business even after the expiry of a fixed period, it becomes a partnership at will. This means that the partnership no longer has a fixed duration and can be terminated by any partner at any time without notice. The partners are now operating on an indefinite basis and have not entered into a new agreement or renewed the partnership for a specific period.

In order to carry on banking business, the maximum number of partners should not exceed 10. This is because banking businesses require a high level of trust and confidentiality, and having a smaller number of partners ensures better control and accountability. Additionally, a smaller number of partners allows for faster decision-making and efficient management of the business operations.

The statement is false because certain names with words like Crown, Emperor, King, Empire etc. can be used only with the consent of the State Government. There is a legal restriction on the selection of a firm name when it comes to using these specific words.

The correct answer is The Indian Partnership Act,1932. This act contains the legal provisions relating to partnerships in India. It governs the formation, operation, and dissolution of partnerships, as well as the rights and liabilities of partners. It provides guidelines on partnership agreements, capital contributions, profit sharing, decision-making, and other important aspects of partnership business. The act also outlines the procedures for registration and the consequences of non-registration of partnerships. Overall, The Indian Partnership Act,1932 is the relevant legislation for partnerships in India.

A dormant partner is a partner in a business who is not actively involved in the day-to-day operations of the firm and is not known to outsiders. This means that the dormant partner does not participate in the management of the business and is not involved in making decisions or carrying out any business activities. However, the dormant partner still has a share in the profits of the firm and may receive a portion of the profits based on their agreed-upon partnership agreement. The key characteristic of a dormant partner is their lack of activity and visibility to those outside of the business.

A partnership for fixed period refers to a business arrangement where the partnership has a predetermined duration that cannot be dissolved by any partner at their will. This means that all partners are legally bound to continue the partnership until the agreed-upon period ends, regardless of their individual intentions or desires. This type of partnership provides stability and certainty for the partners involved, as they are obligated to fulfill their responsibilities and commitments for the specified period.