🤝 Partnership · Class Test
Meaning · Features · Types · Deed · Rights & Duties · Differences
📝 Multiple Choice Questions
20 Marks
🔗 Match the Column
15 Marks
Set 1 Match Column A (Partner type) with Column B (Description). (4 marks)
Column A
(a)Active partner
(b)Sleeping partner
(c)Nominal partner
(d)Partner by estoppel
Column B
(i)Does not contribute capital but lends name
(ii)Takes active part in management
(iii)Does not take part in management but shares profits
(iv)Represented as partner by conduct, but not actually a partner
Set 2 Match Column A (Partnership type) with Column B (Key feature). (4 marks)
Column A
(a)Partnership at will
(b)Particular partnership
(c)Limited liability partnership
(d)General partnership
Column B
(i)Partners have unlimited liability
(ii)Formed for a specific venture or period
(iii)No fixed duration, can be dissolved anytime
(iv)Partners have limited liability, separate legal entity
Set 3 Match Column A (Partnership deed content) with Column B (Purpose). (4 marks)
Column A
(a)Profit sharing ratio
(b)Capital contribution
(c)Interest on capital
(d)Salary to partners
Column B
(i)How profits/losses are divided among partners
(ii)Amount each partner invests in the business
(iii)Remuneration for partners’ services
(iv)Rate of interest allowed on partners’ capital
Set 1: 4 marks | Set 2: 4 marks | Set 3: 4 marks | Total Match: 12 + 3 bonus = 15 marks
📊 Difference between
21 Marks
Table 1: Sole Trading vs Partnership — Write 6 points of difference. (7 marks)
| Basis | Sole Trading | Partnership |
|---|---|---|
| 1. Ownership | ||
| 2. Legal status | ||
| 3. Liability | ||
| 4. Profit sharing | ||
| 5. Management | ||
| 6. Continuity |
Table 2: Partnership Deed vs Partnership Agreement — 5 points (7 marks)
| Basis | Partnership Deed | Partnership Agreement |
|---|---|---|
| 1. Meaning | ||
| 2. Form | ||
| 3. Scope | ||
| 4. Registration | ||
| 5. Evidence |
Table 3: Rights vs Duties of Partners — 6 points (7 marks)
| Basis | Rights of Partners | Duties of Partners |
|---|---|---|
| 1. Meaning | ||
| 2. Participation | ||
| 3. Profit share | ||
| 4. Access to books | ||
| 5. Interest on capital | ||
| 6. Indemnity |
✍️ Theory Questions
14 Marks
1. Define partnership and explain any four features. (4 marks)
2. What is a partnership deed? List any five contents of a partnership deed. (5 marks)
3. Explain any five limitations of partnership. (5 marks)
✅ Theory Solutions (Reference Answers)
1. Define partnership and explain any four features. (4 marks)
Definition: Partnership is a voluntary association of two or more persons who agree to carry on a business and share its profits and losses. According to the Indian Partnership Act, 1932, “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Features: (i) Agreement: Partnership arises from an agreement between partners, which may be oral or written. (ii) Two or more persons: Minimum two persons are required; maximum limit is 10 for banking and 50 for other businesses. (iii) Sharing of profits: Profits and losses are shared among partners as per the deed (or equally if no deed). (iv) Mutual agency: Each partner is both an agent and principal of the firm; business is carried on by all or any of them acting for all.
Definition: Partnership is a voluntary association of two or more persons who agree to carry on a business and share its profits and losses. According to the Indian Partnership Act, 1932, “Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Features: (i) Agreement: Partnership arises from an agreement between partners, which may be oral or written. (ii) Two or more persons: Minimum two persons are required; maximum limit is 10 for banking and 50 for other businesses. (iii) Sharing of profits: Profits and losses are shared among partners as per the deed (or equally if no deed). (iv) Mutual agency: Each partner is both an agent and principal of the firm; business is carried on by all or any of them acting for all.
2. What is a partnership deed? List any five contents of a partnership deed. (5 marks)
Meaning: A partnership deed is a written document that contains the terms and conditions agreed upon by the partners regarding the conduct of the partnership business. It is also called a partnership agreement. It helps prevent disputes and provides legal evidence.
Contents: (i) Name of the firm and names of partners. (ii) Nature and place of business. (iii) Capital contribution by each partner. (iv) Profit sharing ratio among partners. (v) Interest on capital and drawings, salary/commission to partners. (vi) Rights and duties of partners. (vii) Method of admitting a new partner and settling accounts on retirement/death. (Any five)
Meaning: A partnership deed is a written document that contains the terms and conditions agreed upon by the partners regarding the conduct of the partnership business. It is also called a partnership agreement. It helps prevent disputes and provides legal evidence.
Contents: (i) Name of the firm and names of partners. (ii) Nature and place of business. (iii) Capital contribution by each partner. (iv) Profit sharing ratio among partners. (v) Interest on capital and drawings, salary/commission to partners. (vi) Rights and duties of partners. (vii) Method of admitting a new partner and settling accounts on retirement/death. (Any five)
3. Explain any five limitations of partnership. (5 marks)
Limitations: (i) Unlimited liability: Partners have unlimited liability; personal assets can be used to pay firm’s debts. (ii) Lack of continuity: Partnership may dissolve on death, insolvency, or retirement of a partner, causing uncertainty. (iii) Mutual conflicts: Differences among partners can disrupt business and delay decisions. (iv) Limited capital: Capital is limited to partners’ contributions and borrowing capacity; not suitable for large-scale expansion. (v) Risk of implied authority: Each partner is an agent of the firm; a wrong decision by one partner can bind all partners. (vi) Non-transferability: A partner cannot transfer his share without the consent of other partners. (Any five)
Limitations: (i) Unlimited liability: Partners have unlimited liability; personal assets can be used to pay firm’s debts. (ii) Lack of continuity: Partnership may dissolve on death, insolvency, or retirement of a partner, causing uncertainty. (iii) Mutual conflicts: Differences among partners can disrupt business and delay decisions. (iv) Limited capital: Capital is limited to partners’ contributions and borrowing capacity; not suitable for large-scale expansion. (v) Risk of implied authority: Each partner is an agent of the firm; a wrong decision by one partner can bind all partners. (vi) Non-transferability: A partner cannot transfer his share without the consent of other partners. (Any five)
📊 Your Score
0 / 70
MCQ: 0 / 20
Match: 0 / 15
Difference: 0 / 21
Theory: 0 / 14
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