Registration & Dissolution of Firm
By Bharat Galani MeraSkill.com Š MeraSkill
Registration & Dissolution of Firm
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Registration of Firm
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Index What is Registration of Firm How a firm is registered Partnership Deed What happens if a firm is not registered Suit by reconstituted firm without re-registration Š MeraSkill
What is Registration of Firm Partnership firm registered with the Registrar of firm Registration is Optional Maharashtra & Gujarat
except
for
the
states
of
Unregistered firm suffers from number of disablities
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A registered firm is a : (a) legal person (b) Illegal person (c) Corporate body (d) Cooperative organisation
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A registered firm is a : (a) legal person (b) Illegal person (c) Corporate body (d) Cooperative organisation
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How a firm is registered 1. Post or deliver statement in prescribed form 2. Information in the form - Firm’s name, principle place of business, name of other place of business, date of joining of each partner,name and address of partners and duration of the firm. 3. Registrar is satisfied with the form – records entry in register And issue a Certificate of Registration. 4. Registration complete when application is made in the Š MeraSkill prescribed form and fee is paid.
Partnership Deed
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Partnership Deed
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Partnership Deed A partnership deed should contain the following clause: • Name of the parties • Nature of business • Duration of partnership • Name of the firm • Capital • Share of partners in profits and losses • Banking, Account firm • Books of account • Powers of partners • Retirement and expulsion of partners • Death of partner • Dissolution of firm • Settlement of disputes
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Quiz
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The conclusive evidence of registration of firm is : (a) The certificate of registration of firms (b) The certified copy of register of firm (c) The register of central government (d) None of these
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The conclusive evidence of registration of firm is : (a) The certificate of registration of firms (b) The certified copy of register of firm (c) The register of central government (d) None of these
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Registrar of firms under Section 57 of the Indian Partnership Act is appointed by : (a) Central Government (b) State Government (c) Trade Associations (d) Local Bodies
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Registrar of firms under Section 57 of the Indian Partnership Act is appointed by : (a) Central Government (b) State Government (c) Trade Associations (d) Local Bodies
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A partnership deed must be drafted properly and stamped according to provisions of : (a) Indian Stamp Act (b) Indian Tax Act (c) The Companies Act (d) The Indian Partnership Act
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A partnership deed must be drafted properly and stamped according to provisions of : (a) Indian Stamp Act (b) Indian Tax Act (c) The Companies Act (d) The Indian Partnership Act
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Register of firm is open to inspection : (a) Free of cost (b) On payment of such fee as is prescribed (c) Subject to furnishing Bank Guarantee (d) On filing an affidavit to this effect
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Register of firm is open to inspection : (a) Free of cost (b) On payment of such fee as is prescribed (c) Subject to furnishing Bank Guarantee (d) On filing an affidavit to this effect
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XYZ a partnership firm was constituted on 1st April. On 25th April the partners resolved to get the firm registered with the Registrar of Firm. The firm prepared the necessary documents for registration on 26th April which were signed on 28th April. They send the documents to the Registrar office on 30th April by Registered post which was received in the Registrar office on 4th May. The Registrar filed the statement and entered the firms name in the Register of Firms on 20th May. The firm will be deemed to have been registered on : (a) 30th April (b) 28th April (c) 20th May (d) 4th May
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XYZ a partnership firm was constituted on 1st April. On 25th April the partners resolved to get the firm registered with the Registrar of Firm. The firm prepared the necessary documents for registration on 26th April which were signed on 28th April. They send the documents to the Registrar office on 30th April by Registered post which was received in the Registrar office on 4th May. The Registrar filed the statement and entered the firms name in the Register of Firms on 20th May. The firm will be deemed to have been registered on : (a) 30th April (b) 28th April (c) 20th May (d) 4th May
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If a firm wants to register itself, it will go to (a) Registrar of Firms (b) Registrar of Companies (c) Court (d) Any of these
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If a firm wants to register itself, it will go to (a) Registrar of Firms (b) Registrar of Companies (c) Court (d) Any of these
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If any mistake has been done in the Register of firms then application for rectification can be given: (a) By active partner (b) By majority of the partners (c) By consent of one partner (d) By consent of all the partners
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If any mistake has been done in the Register of firms then application for rectification can be given: (a) By active partner (b) By majority of the partners (c) By consent of one partner (d) By consent of all the partners
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In order to get a copy of the register of Registrar of firms, a firm is required to pay certain fees as prescribed by the law : (a) True (b) False (c) Partly true (d) None.
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In order to get a copy of the register of Registrar of firms, a firm is required to pay certain fees as prescribed by the law : (a) True (b) False (c) Partly true (d) None.
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Application for registration of a Partnership Firm should be signed by (a) 2/3rd of the total number of partners (b) At least 3/4th of the partners (c) Any one of the partners (d) All the partners.
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Application for registration of a Partnership Firm should be signed by (a) 2/3rd of the total number of partners (b) At least 3/4th of the partners (c) Any one of the partners (d) All the partners.
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To constitute a partnership agreement, it : (a) Must be in writing (b) Can be oral or written (c) Neither oral nor written (d) Only oral
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To constitute a partnership agreement, it : (a) Must be in writing (b) Can be oral or written (c) Neither oral nor written (d) Only oral
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Partnership Deed signifies: (a) Agreement between the parties (b) Application to Registrar (c) Certificate of Registered Partnership (d) All of the above
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Partnership Deed signifies: (a) Agreement between the parties (b) Application to Registrar (c) Certificate of Registered Partnership (d) All of the above
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Partnership agreement can be : (a) Oral (b) Written (c) Oral or written (d) Written on stamp paper
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Partnership agreement can be : (a) Oral (b) Written (c) Oral or written (d) Written on stamp paper
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Partnership deed is also called as: (a) Partnership document (b) Articles of Partnership (c) Both of the above (d) None of the above
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Partnership deed is also called as: (a) Partnership document (b) Articles of Partnership (c) Both of the above (d) None of the above
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A partnership arises from (a) Agreement (b) By spoken words (c) By court of law (d) All of the above
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A partnership arises from (a) Agreement (b) By spoken words (c) By court of law (d) All of the above
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What if firm is not registered English law vs Indian law Disablities 1. No suit in a civil court by firm or partners against third party 2. No refief to partners for set –off of claim exceeding `100 3. Aggrived partner cannot bring legal action against other partners of the firm. Except when firm is dissolved
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Firm is not registered Below Rights are not effected :1. Right of third party to sue the firm 2. Rights of partner to sue for : -
dissolution of firm, account settelment, realisation of dissolved firm’s property
3. Power of an Official Assignee, Receiver of court to realise the property of the insolvent partner 4. Right to sue or set off suits not more than Rs. 100. Š MeraSkill
P is indebted to the firm for a sum of Rs. 500 and the firm files a suit against . Will the firm succeed if the firm is not registered : (a) No, because the firm is unregistered (b) No, because the sum doesn't exceeds Rs. 1,000 (c) No, because P is not knowing about the debt (d) None of these
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P is indebted to the firm for a sum of Rs. 500 and the firm files a suit against . Will the firm succeed if the firm is not registered : (a) No, because the firm is unregistered (b) No, because the sum doesn't exceeds Rs. 1,000 (c) No, because P is not knowing about the debt (d) None of these
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A non-registered firm can claim a set off of an amount not exceeding: (a) Rs.100 (b) Rs.1,000 (c) Rs.10,000 (c) Any amount
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A non-registered firm can claim a set off of an amount not exceeding: (a) Rs.100 (b) Rs.1,000 (c) Rs.10,000 (c) Any amount
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Non registration of Partnership is not a bar for : (a) Civil proceeding (b) Criminal proceeding (c) Both of them (d) Neither of them
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Non registration of Partnership is not a bar for : (a) Civil proceeding (b) Criminal proceeding (c) Both of them (d) Neither of them
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One of the following is not the disability of an unregistered firm: (a) It cannot file a suit against the third parties (b) its partners cannot file a suit against the firm. (c) It cannot claim a set off exceeding Rs.100 (d) It cannot be sued by a third party.
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One of the following is not the disability of an unregistered firm: (a) It cannot file a suit against the third parties (b) its partners cannot file a suit against the firm. (c) It cannot claim a set off exceeding Rs.100 (d) It cannot be sued by a third party.
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Suit by reconstituted firm without re-registration Is valid provided : i) The suit must be instituted by or on behalf of the firm which had been registered. ii) The person suing had been shown as a partner in the register of firm.
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Summary What is Registartion of Firm How a firm is registered Partnership Deed What happens if a firm is not registered Suit by reconstituted firm without re-registration Š MeraSkill
Dissolution of Firm
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Index What is dissolution of firm? How firms are dissolved What happens when firm is dissolved Sale of goodwill of firm after dissolution Garner vs Murray Mode of giving public notice Š MeraSkill
What is Dissolution of Firm? Dissolution of firm vs. Dissolution of partnership
Dissolution of firm - Whole firm is dissolved
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How firm is dissolved? 1. Dissolution by Agreement 2. Compulsory Dissolution 3. Contingent Dissolution 4. Dissolution by Notice 5. Dissolution by Court a. b. c. d. e. f. g.
Insanity Permanent Incapacity Misconduct Breach of Agreement Transfer of Interest Losses Just and Equitable Cause
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How firms are dissolved ? 1. Dissolution by Agreement A firm is a creation of an agreement between partners. Partners may agree to terminate the firm and the firm shall be dissolved. 2. Compulsory Dissolution The Partnership Act, 1932 provides that under the following circumstances the firm shall be compulsorily dissolved: (a) All of the partners are declared as insolvent. (b) All of the partners except one are declared as insolvent. (c) The business carried on by the firm becomes unlawful. Š MeraSkill
How firms are dissolved ? 3 . Contingent Dissolution. On the happening of anyone of the following contingencies, the partners of a firm may decide to close the business of the firm:(a) If the firm is constituted for a fixed term, on the expiry of that term. (b) If the firm is constituted to carry out one or more projects, on the completion thereof. (c) If a partner of the firm dies. (d) If a partner of the firm is declared as insolvent .
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How firms are dissolved ? 4.Dissolution by Notice (a) Where the partnership is at will, the firm may be dissolved by any partner by giving a notice in writing to all the other partners of his intention to dissolve the firm. (b) The firm is dissolved as from the date mentioned in the notice as date of dissolution or if no date is mentioned, as from the date of communication of the notice.
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How firms are dissolved ? 5.Dissolution by Court The court may dissolve the firm if a partner files a suit for dissolution of the firm on any of the following grounds: (a) Insanity. That a partner has become of unsound mind. (b) Permanent Incapacity. That a partner, other than the partner suing, has become in any way permanently incapable of performing his duties as partner. (c) Misconduct. That a partner, other than partner suing, is guilty of conduct which is likely to affect prejudicially the carrying on of the business, regard being had to the nature of the business. Š MeraSkill
How firms are dissolved ? (d) Breach of Agreement That a partner, other than partner suing, willfully or persistently commits breach of agreement relating to the management of the affairs of the firm. (e) Transfer of Interest That a partner, other than partner suing, has transferred whole of his interest in the firm to a third party or has allowed his share to be sold in execution of a decree. (f) Losses That the business of the firm cannot be carried on except at a loss. Š MeraSkill
How firms are dissolved ? (g) Just and Equitable Cause On any other ground which renders it just and equitable that the firm should be dissolved Deadlock in the management Partners not in talking terms Loss of substratum Gambling by a partner on a stock exchange
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How firms are dissolved ?
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A partnership may be dissolved: (a) On death of partner (b) On completion of work or venture (c) On expiry of term (d) All the above
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A partnership may be dissolved: (a) On death of partner (b) On completion of work or venture (c) On expiry of term (d) All the above
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Voluntary Dissolution is : (a) Dissolution by the adjudication of all the partners as insolvent (b) Dissolution as a result of an agreement between all the partners (c) Dissolution by the business of the firm becoming unlawful (d) All of these
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Voluntary Dissolution is : (a) Dissolution by the adjudication of all the partners as insolvent (b) Dissolution as a result of an agreement between all the partners (c) Dissolution by the business of the firm becoming unlawful (d) All of these
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Which of the following are grounds for compulsory dissolution of the firm by court? (a) Insanity of a partner (b) Misconduct of a partner (c) Perpetual losses in business (d) All of these
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Which of the following are grounds for compulsory dissolution of the firm by court? (a) Insanity of a partner (b) Misconduct of a partner (c) Perpetual losses in business (d) All of these
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Application for dissolution of a firm on the ground of permanent incapacity of a partner can be made by : (a) Any partner (b) Any partner other than who is permanently incapacitated (c) Police Officer (d) CBI
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Application for dissolution of a firm on the ground of permanent incapacity of a partner can be made by : (a) Any partner (b) Any partner other than who is permanently incapacitated (c) Police Officer (d) CBI
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Courts can order dissolution of a firm on the grounds other than : (a) Misconduct (b) Superannuation of a partner (c)Incapacity of partner (d) Continued Losses
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Courts can order dissolution of a firm on the grounds other than : (a) Misconduct (b) Superannuation of a partner (c)Incapacity of partner (d) Continued Losses
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A partnership firm is compulsorily dissolved where: (a) All Partners have become Insolvent (b) Firm's business has become unlawful (c) The fixed term has expired (d) In case All Partners have become Insolvent AND Firm's business has become unlawful
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A partnership firm is compulsorily dissolved where: (a) All Partners have become Insolvent (b) Firm's business has become unlawful (c) The fixed term has expired (d) In case All Partners have become Insolvent AND Firm's business has become unlawful
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In the absence of any contract to the contrary insolvency of a partner results in: (a) Dissolution of partnership, but not of the firm. (b) Dissolution of firm as well as partnership. (c) Neither dissolution of firm, nor dissolution of partnership. (d) None of the above.
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In the absence of any contract to the contrary insolvency of a partner results in: (a) Dissolution of partnership, but not of the firm. (b) Dissolution of firm as well as partnership. (c) Neither dissolution of firm, nor dissolution of partnership. (d) None of the above.
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A partnership firm will not be Compulsory dissolved if (a) One of the partners of the firm becomes insolvent. (b) The business of the firm becomes illegal. (c) Only one of the several business which can be separated from the other business of the firm becomes illegal. (d) The different business run by the firm cannot be separated.
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A partnership firm will not be Compulsory dissolved if (a) One of the partners of the firm becomes insolvent. (b) The business of the firm becomes illegal. (c) Only one of the several business which can be separated from the other business of the firm becomes illegal. (d) The different business run by the firm cannot be separated.
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When all the partners except one become insolvent, the firm is (a) Compulsorily dissolved (b) Not compulsorily dissolved (c) Reconstituted (d) Renewed
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When all the partners except one become insolvent, the firm is (a) Compulsorily dissolved (b) Not compulsorily dissolved (c) Reconstituted (d) Renewed
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On the ground,__________ one or more partners of a firm individually or together apply to the court for dissolution of the firm. (a) A partner being of unsound mind (b) Misconduct of a partner (c) Persistent losses in the firm business (d) All the above
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On the ground,__________ one or more partners of a firm individually or together apply to the court for dissolution of the firm. (a) A partner being of unsound mind (b) Misconduct of a partner (c) Persistent losses in the firm business (d) All the above
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When a partner of a firm is adjudicated as an insolvent, he ceases to be a partner as (a) On the date of order of adjudication (b) On the date of dissolution (c) On the date of information of insolvency (d) Decided by Indian partnership firm
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When a partner of a firm is adjudicated as an insolvent, he ceases to be a partner as (a) On the date of order of adjudication (b) On the date of dissolution (c) On the date of information of insolvency (d) Decided by Indian partnership firm
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Consequences of Dissolution
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Consequences of Dissolution
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Consequences of Dissolution (e)
(f)
(g)
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A and B become partners for 16 years. A pays B a premium of Rs. 5,000. At the end of 8 years, there is dispute between A and B and they declare a dissolution : (a) A can get back the entire amount of the premium paid by him to B (b) A can get back a reasonable part of the premium (c) A can get back Rs. 2,500 from (d) A cannot get back any amount of premium paid by him
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A and B become partners for 16 years. A pays B a premium of Rs. 5,000. At the end of 8 years, there is dispute between A and B and they declare a dissolution : (a) A can get back the entire amount of the premium paid by him to B (b) A can get back a reasonable part of the premium (c) A can get back Rs. 2,500 from (d) A cannot get back any amount of premium paid by him
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Loss arising out of partner's insolvency can be recouped from (a) Solvent partners (b) The firm itself (c) The partner's estate (d) The partner's legal heirs
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Loss arising out of partner's insolvency can be recouped from (a) Solvent partners (b) The firm itself (c) The partner's estate (d) The partner's legal heirs
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At the time of dissolution of a firm, every partners or his representative is entitled to have the_______applied in payment of the debts and liabilities of the firm : (a) Assets of the firm (b) Property of the firm (c) Liability of the firm (d) Goodwill of the firm
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At the time of dissolution of a firm, every partners or his representative is entitled to have the_______applied in payment of the debts and liabilities of the firm : (a) Assets of the firm (b) Property of the firm (c) Liability of the firm (d) Goodwill of the firm
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When a partner's capital account has a debit balance and he is unable to bring in necessary cash to make up the deficiency, it is called (a) Loss on dissolution of partnership (b) Loss on dissolution of firm (c) Loss arising out of partner's insolvency (d) Loss on distribution of assets
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When a partner's capital account has a debit balance and he is unable to bring in necessary cash to make up the deficiency, it is called (a) Loss on dissolution of partnership (b) Loss on dissolution of firm (c) Loss arising out of partner's insolvency (d) Loss on distribution of assets
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The private property of any partner shall be applied first in payment of : (a) Firm's debt (b) Joint debt (c) Personal debts (d) Unsecured debts
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The private property of any partner shall be applied first in payment of : (a) Firm's debt (b) Joint debt (c) Personal debts (d) Unsecured debts
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On dissolution the partners remain liable until (a) Public notice is given (b) The registrar strikes off the name (c) Partners dues are paid off (d) Accounts are settled
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On dissolution the partners remain liable until (a) Public notice is given (b) The registrar strikes off the name (c) Partners dues are paid off (d) Accounts are settled
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X, Y and Z are partners in a firm. Y and Z died in an accident. X continues the business in the name of the firm ? (a) X cannot continue the business of the firm. (b) X can continue the business of the firm. (c) X alone cannot run a firm. (d) X and legal representative of x and y will have to run the business of the firm.
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X, Y and Z are partners in a firm. Y and Z died in an accident. X continues the business in the name of the firm ? (a) X cannot continue the business of the firm. (b) X can continue the business of the firm. (c) X alone cannot run a firm. (d) X and legal representative of x and y will have to run the business of the firm.
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ABC is a registered firm. C died on 30th June. A and B sue X in the name of ABC. What is the consequence? (a) The suit cannot be maintained. (b) The suit can be maintained. (c) The suit can be maintained when the firm is freshly registered (d) None of the above.
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ABC is a registered firm. C died on 30th June. A and B sue X in the name of ABC. What is the consequence? (a) The suit cannot be maintained. (b) The suit can be maintained. (c) The suit can be maintained when the firm is freshly registered (d) None of the above.
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The amount received by a partnership firm from the insurance company on the maturity of a Joint Life Policy taken by the firm will be distributed amongst the partner. (a) Equally. (b) In the profit sharing ratio. (c) In the ratio of capital balances at the beginning of the year. (d) In the ratio of capital balances at the end of the accounting
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The amount received by a partnership firm from the insurance company on the maturity of a Joint Life Policy taken by the firm will be distributed amongst the partner. (a) Equally. (b) In the profit sharing ratio. (c) In the ratio of capital balances at the beginning of the year. (d) In the ratio of capital balances at the end of the accounting
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XYZ firms consists of 4 partner viz, X, Y, Z and A, having one fourth share each in the profits of the firm. According to X, Y and Z activities of A are not in the interest of the partnership and thus want to expel A from the firm. Advise whether (a) X, Y and Z should seek retirement from the firm (b) No, X, Y and Z cannot expel A from the firm (c) Yes, X, Y and Z can expel A from, the firm (d) None of the above.
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XYZ firms consists of 4 partner viz, X, Y, Z and A, having one fourth share each in the profits of the firm. According to X, Y and Z activities of A are not in the interest of the partnership and thus want to expel A from the firm. Advise whether (a) X, Y and Z should seek retirement from the firm (b) No, X, Y and Z cannot expel A from the firm (c) Yes, X, Y and Z can expel A from, the firm (d) None of the above.
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The surplus remaining after settlement of debts and liabilities of the firm in case of dissolution shall be (a) Credited to Central Revenue Account of the Government of India (b) Credited to Reserve Bank of India (c) Distributed among the partner equally (d) Distributed among the partner' according to their profit sharing ratio
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The surplus remaining after settlement of debts and liabilities of the firm in case of dissolution shall be (a) Credited to Central Revenue Account of the Government of India (b) Credited to Reserve Bank of India (c) Distributed among the partner equally (d) Distributed among the partner' according to their profit sharing ratio
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Garner vs Murray
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The loss arising out of partners insolvency shall be borne by________ according to Garner Vs Murray case: (a) All the Partner's Equally (b) Solvent partners in capital ratio (c) All the partners in profit & loss sharing ratio (d) None of the above
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The loss arising out of partners insolvency shall be borne by________ according to Garner Vs Murray case: (a) All the Partner's Equally (b) Solvent partners in capital ratio (c) All the partners in profit & loss sharing ratio (d) None of the above
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The accounting rule in respect of loss arising due to insolvency of a partner is dealt within (a) Garner vs. Murray (b) Hyde vs. Wrench (c) Derry vs. Peek (d) All of these
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The accounting rule in respect of loss arising due to insolvency of a partner is dealt within (a) Garner vs. Murray (b) Hyde vs. Wrench (c) Derry vs. Peek (d) All of these
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Mode of Giving Public Notice
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In case of unregistered firms, public notice is given in the following manner: (a) Publishing the notice in one vernacular newspaper circulating in the district where the firm's principal place of business is situated (b) Publishing the notice in the Official Gazette (c) Both of them (d) Either of them
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In case of unregistered firms, public notice is given in the following manner: (a) Publishing the notice in one vernacular newspaper circulating in the district where the firm's principal place of business is situated (b) Publishing the notice in the Official Gazette (c) Both of them (d) Either of them
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Summary What is dissolution of firm? How firms are dissolved What happens when firm is dissolved Sale of goodwill of firm after dissolution Garner vs Murray Mode of giving public notice Š MeraSkill
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