Indian Partnership Act MCQ Quiz in తెలుగు - Objective Question with Answer for Indian Partnership Act - ముఫ్త్ [PDF] డౌన్‌లోడ్ కరెన్

The correct answer is Section 14.

Key Points

• Section 14 of The Partnership Act, 1932, provides for The Property of the Firm.
• It states that: Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
  Unless the contrary intention appears, property and rights and interest in property acquired with money belonging to the firm are deemed to have been acquired for the firm. 

The correct answer is contract, status.

Key Points

• Section 5 of The Partnership act, 1932, provides for Partnership not created by status.
• It states that the relation of partnership arises from contract and not from status; and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business. 

The correct answer is Section 13.

Key Points

• Section 13 of the Partnership Act, 1932, provides for the Mutual Right and Liabilities.
• It states that: Subject to contract between the partners -
  (a) a partner is not entitled to receive remuneration for taking part in the conduct of the business;
  (b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm;
  (c) where a partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of profits;
  (d) a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent. per annum;
  (e) the firm shall indemnify a partner in respect of payments made and liabilities incurred by him
  (i) in the ordinary and proper conduct of the business; and
  (ii) in doing such act, in an emergency, for the purpose of protecting the firm from loss, as would be done by a person of ordinary prudence, in his own case, under similar circumstances; and
  (f) a partner shall indemnify the firm for any loss caused to it by his willful neglect in the conduct of the business of the firm. 

The correct answer is a majority of the partners.

Key Points

• Section 12 of the Partnership Act, 1932, provides for The Conduct of Business.
• It states that: Subject to contract between the partners -
  (a) every partner has a right to take part in the conduct of the business;
  (b) every partner is bound to attend diligently to his duties in the conduct of the business;
  (c) any difference arising as to ordinary matters connected with the business may be decided by a majority of the partners, and every partner shall have the right to express his opinion before the matter is decided, but no change may be made in the nature of the business without the consent of all the partners;
  (d) every partner has a right to have access to and to inspect and copy any of the books of the firm;
  (e) in the event of the death of a partner, his heirs or legal representatives or their duly authorised agents shall have a right of access to and to inspect and copy any of the books of the firm.  

The correct answer is General duties of partners.

Key Points

• Section 9 of the Partnership Act, 1932, provides for the General Duties of Partners.
• It states that partners are bound to carry on the business of the firm to greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner, his heir or legal representative. 

The correct answer is option 2

Key PointsSection 21 of the Indian Partnership Act, 1932 deals with Partner's Authority in an Emergency. 
A partner has authority, in an emergency, to do all such acts for the purpose of protecting the firm from loss as would be done by a person of ordinary prudence, in his own case, acting under similar circumstances, and such acts bind the firm. 

Additional Information

• Section 21 of the Indian Partnership Act, 1932 provides certain authority to partners in emergencies. This section deals with the implied authority of partners to act for the firm in emergency situations. It states that every partner is an agent of the firm and has the authority to do whatever is necessary for the purpose of carrying on the usual business of the firm in emergencies.
• This means that in situations where immediate action is required to protect the interests of the partnership or to prevent imminent harm or loss, partners are empowered to take necessary actions even if such actions are not expressly authorized in the partnership agreement. However, this authority is limited to actions that are deemed necessary and reasonable under the circumstances of the emergency.
• It's important to note that while partners have implied authority in emergencies, they are still expected to act in the best interests of the partnership and its stakeholders. If a partner exceeds their authority or acts negligently or recklessly, they may be held personally liable for any resulting damages or losses to the partnership.

The correct answer is option 1

Key PointsThe obligations of a partner in a partnership firm are primarily governed by the terms stipulated in the partnership agreement. This agreement, which can be written or oral, outlines the rights, duties, and responsibilities of each partner within the partnership.  

The obligations of a partner are determined as per the partnership agreement:

• Contribution of Capital: The partnership agreement typically specifies the amount of capital each partner is required to contribute to the partnership. This contribution may be in the form of cash, property, or services, as agreed upon by the partners.
• Allocation of Profits and Losses: The agreement defines how profits and losses are to be allocated among the partners. This allocation may be based on the partners' capital contributions, their ownership interests, or other criteria agreed upon by the partners.
• Management and Decision-Making: The partnership agreement outlines the management structure of the partnership and specifies the decision-making process. It may designate certain partners as managing partners with greater authority or provide for decision-making by consensus or majority vote.
• Scope of Authority: Partners' authority to act on behalf of the partnership is typically defined in the partnership agreement. This includes the types of transactions partners are authorised to undertake and any limits or restrictions on their authority.
• Duties of Loyalty and Care: The agreement may include provisions requiring partners to act in the best interests of the partnership and exercise reasonable care and diligence in carrying out their duties. This duty of loyalty often prohibits partners from engaging in activities that may conflict with the interests of the partnership.
• Duration of Partnership: The partnership agreement may specify the duration of the partnership and the conditions under which it may be dissolved or extended. It may also address procedures for admitting new partners or allowing for the retirement or expulsion of existing partners.
• Dispute Resolution: The agreement may include provisions for resolving disputes among partners, such as arbitration or mediation clauses, to facilitate the resolution of conflicts in a timely and efficient manner.
• Confidentiality and Non-Disclosure: Partners may be required to maintain the confidentiality of partnership affairs and refrain from disclosing sensitive information to third parties, as specified in the partnership agreement.

The correct answer is option 1

Key PointsSection 32 of the Indian Partnership Act, 1932 which deals with Retirement of a partner from the firm. reads as under : 

(1)A partner may retire,
(a)with the consent of all the other partners,
(b)in accordance with an express agreement by the partners, or
(c)where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.

(2)A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.
(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement:
Provided that a retired partner is not liable to any third party who deals with the firm without knowing that he was a partner.
(4) Notices under sub-section (3) may be given by the retired partner or by any partner of the reconstituted firm.

Additional Information Section 32 of the Indian Partnership Act, 1932 deals with the retirement of a partner from a partnership firm. This section outlines the following key points regarding retirement:

• Right to retire: Any partner has the right to retire from the partnership firm, subject to the provisions of the partnership agreement, if any.
• Notice of retirement: A retiring partner must give a notice in writing to all the other partners of his intention to retire from the partnership.
• Effective date of retirement: Unless otherwise agreed upon by the partners, a retiring partner's retirement becomes effective on the date mentioned in the notice or, if no date is specified, from the date of communication of the notice.
• Continuation of partnership: The partnership can continue its business after the retirement of a partner, with the remaining partners or any new partners that may be admitted.
• Liability of retiring partner: A retiring partner continues to be liable to third parties for acts of the firm done before his retirement unless there is an agreement to the contrary. However, he is not liable for any partnership debts or obligations incurred after his retirement.
• Settlement of accounts: Upon the retirement of a partner, his share in the partnership assets and liabilities must be settled, either by agreement among the partners or by a court, if necessary.

The correct answer is option 3 

Key PointsSection 25 of the Indian Partnership Act, 1932 talks about LIABILITY OF A PARTNER FOR ACTS OF THE FIRM.
Every partner is liable jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. 

Additional Information

•  Joint and several liability means that each partner in the partnership is individually and collectively responsible for the debts and obligations of the partnership. This implies that creditors can choose to sue any one or more of the partners individually or collectively to recover debts owed by the partnership. In other words, each partner is liable for the full amount of the partnership's debts, not just a proportional share.
• This principle of joint and several liability is fundamental to the concept of partnership and is designed to ensure that creditors have an effective means of recovering debts owed by the partnership. It also underscores the importance of trust and responsibility among partners, as each partner's actions can potentially impact the entire partnership's financial obligations.

The correct answer is option 4 

Key Points Section 20 of the Indian Partnership Act, 1932 talks about EXTENSION AND RESTRICTION OF PARTNER'S IMPLIED AUTHORITY.
The partners in a firm may, by contract between the partners, extend or restrict the implied authority of any partner. Notwithstanding any such restriction, any act done by a partner on behalf of the firm which falls within his implied authority binds the firm, unless the person with whom he is dealing knows of the restriction or does not know or believe that partner to be a partner. 

Additional Information

•  In the context of the Indian Partnership Act, 1932, "implied authority" refers to the authority that partners possess to act on behalf of the partnership within the ordinary course of its business, even if such authority is not expressly granted in the partnership agreement. This implied authority is based on the principle that each partner is an agent of the partnership and, therefore, has the power to bind the partnership to transactions and contracts that are usual or customary for the type of business the partnership conducts.
• Implied authority typically extends to actions such as buying and selling goods, entering into contracts, borrowing money, and other transactions that are customary or necessary for the business conducted by the partnership. However, partners must exercise this authority within the limits set by the partnership agreement or any restrictions placed by the other partners. If a partner exceeds their implied authority, the partnership may not be bound by their actions, unless the other party had no knowledge of the partner's lack of authority.
• Partnerships may also limit the implied authority of partners through the partnership agreement or by providing notice to third parties. This can help prevent partners from engaging in transactions that fall outside the scope of the partnership's business or from exceeding their authority in any way.