Live MCQs of Fundamentals of Partnership (Rights and Liabilities of a Partners Post author:Anurag Pathak Post published:October 13, 2025 Post category:Uncategorized Post comments:0 Comments Live MCQs of Fundamentals of Partnership (Rights and Liabilities of a Partners 0% 1234567891011121314151617 You have 10 minutes to complete the Test. After completion, you would get your final result immediately. Your time is up. Fundamentals of Partnership (Right and Liabilities of a Partner) 1 / 17 In a partnership firm, the right of every partner to participate in the management of the business can be limited by: Government regulations The number of partners in the firm Mutual agreement between the partners The firm's profit margins 2 / 17 If a partner incurs a loss while running a business in competition with the firm, which of the following statements is correct? The loss will be borne solely by the partner involved in the competing business. The loss will be distributed based on the firm's profit-sharing agreement. The firm is obligated to indemnify the partner for the loss. The loss must be shared equally by the firm and the partner. 3 / 17 Assertion (A): If a partner starts a competing business and earns a profit from it, the entire profit must be paid to the partnership firm. Reason (R): Engaging in a competing business violates the fiduciary duties of a partner towards the partnership firm. A is true, but R is false A is false, but R is true Both A and R are true, but R is not the correct explanation of A Both A and R are true, and R is the correct explanation of A 4 / 17 Assertion (A): Every partner in a partnership firm has the right to participate in the management of the business. Reason (R): Partnership firms are formed with mutual consent, and equal participation ensures fairness in decision-making. A is false, but R is true A is true, but R is false Both A and R are true, but R is not the correct explanation of A Both A and R are true, and R is the correct explanation of A 5 / 17 Which of the following is a right every partner possesses in a partnership firm? The right to deny profit-sharing The right to remain inactive during the firm's operations The right to participate in the management of the business The right to terminate the partnership without consent 6 / 17 Partner X incurred ₹10,000 on behalf of the firm for business-related expenses. As per the Indian Partnership Act, 1932, how should the firm compensate Partner X? Indemnify Partner X for the ₹10,000 expenses Deduct the amount from Partner X's profit share Grant Partner X a higher share in the firm's property Write off the expenses as the firm's loss 7 / 17 Which of the following rights does every partner in a partnership firm possess? The right to be consulted about the affairs of the business The right to be excluded from decision-making The right to avoid any participation in business discussions The right to operate the firm independently 8 / 17 Assertion (A): In a partnership firm, partners A and B cannot admit a new partner, D, if partner C refuses. Reason (R): Admission of a new partner requires the unanimous consent of all existing partners in the firm. Both A and R are true, and R is the correct explanation of A A is false, but R is true Both A and R are true, but R is not the correct explanation of A A is true, but R is false 9 / 17 Assertion (A): Every partner has the right to be consulted about the affairs of the business. Reason (R): Consulting all partners ensures transparency and mutual consent in the decision-making process. A is false, but R is true Both A and R are true, but R is not the correct explanation of A Both A and R are true, and R is the correct explanation of A A is true, but R is false 10 / 17 Which of the following is true regarding a partner's entitlement to interest on an advance loan to the firm? Interest is payable only if expressly mentioned in the partnership deed. If no interest rate is agreed upon, interest is payable at the rate of 12% p.a. If the rate of interest is not agreed upon, the Indian Partnership Act, 1932 mandates payment at 6% p.a. A partner cannot claim interest on advance loans under any circumstances. 11 / 17 Partner X advanced a loan of ₹5,00,000 to the partnership firm. The partnership deed does not specify the rate of interest. As per the Indian Partnership Act, 1932, the annual interest payable to X will be: ₹30,000 ₹35,000 ₹20,000 ₹25,000 12 / 17 In a partnership firm, a new partner can be admitted only if The new partner invests a significant amount of capital The existing partners unanimously agree to the admission The majority of partners vote in favor of the admission The partnership firm incurs financial losses 13 / 17 Assertion (A): A partner can be excluded from being consulted about the affairs of the business. Reason (R): A partner loses the right to be consulted only in cases of specific agreement among all partners. Both A and R are true, but R is not the correct explanation of A A is false, but R is true A is true, but R is false Both A and R are true, and R is the correct explanation of A 14 / 17 Assertion (A): If a partner incurs a loss while running a competing business, the partnership firm is not obligated to bear the loss. Reason (R): Losses from a competing business are borne solely by the partner, as they arise from a breach of partnership obligations. A is true, but R is false A is false, but R is true Both A and R are true, and R is the correct explanation of A Both A and R are true, but R is not the correct explanation of A 15 / 17 In a partnership firm, Partner X starts a competing business and earns a profit of ₹1,00,000 from it. What is the legal obligation of Partner X regarding this profit? The profit must be paid entirely to the firm. Partner X can retain the profit as personal earnings. The profit must be paid entirely to the firm. The profit must be equally shared among the partners. 16 / 17 In a partnership firm, the right to be consulted about the affairs of the business ensures: Sole authority of one partner to make decisions Equal participation in management decisions Restriction on partners' access to business information Freedom to disregard mutual consent 17 / 17 Assertion (A): Partner Z pays ₹1,00,000 on behalf of the firm for procuring essential business equipment. The firm is legally bound to reimburse Partner Z for the payment. Reason (R): Under the Indian Partnership Act, 1932, partners are entitled to indemnification for all payments made for the firm's benefit. A is false, but R is true Both A and R are true, and R is the correct explanation of A A is true, but R is false Both A and R are true, but R is not the correct explanation of A Your score isThe average score is 0% 0% Restart quiz You Might Also Like [CUET] Mock Test of Fundamentals of Partnership (Appropriation of Profit) with Result (Free) October 26, 2025 Live MCQs Mock Test Fundamentals of Partnership (Need of Partnership) with Result (Free) September 13, 2025 CUET Mock Test of Fundamentals of Partnership (Rules in the Absence of Partnership Deed) – 4 October 16, 2025 Leave a Reply Cancel replyCommentEnter your name or username to comment Enter your email address to comment Enter your website URL (optional) Save my name, email, and website in this browser for the next time I comment.
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