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Partnership accounts Flashcards

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1
Q

Essential elements of a valid Partnership?

A

Association of two or more persons.
Agreement.
Business.
Agreement to Share Profits.
Business Carried on by all or any of them acting for all (Mutual Agency)

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2
Q

Section 6

A

Mode of Determining Existence of Partnership

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3
Q

Section 5

A

relation between partners arises from contract not from status

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4
Q

When Partnership is not considered

A

Not retained the record terms and conditions
Books of accounts are not maintained.
Bank Account was not opened
No written intimation

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5
Q

State the differences between partnership and Hindu Undivided Family?

A

Mode of creation
Death of a member
Management
Authority to bind,
Liability
Calling for accounts on closure,
Governing Law
Minor”s capacity
,Continuity,
Number of Members,
Share In the Business.

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6
Q

Partnership deed may contain the following information?

A

Name of the …
Name of all….
Nature and place ….
Date of Commencement…..
Duration of partnership…….
Capital Contribution …….
Profit Sharing ratio….
Admission and Retirement….
Rates of interest on Capital….
Provisions for Settlement of accounts…..
Provision for Salaries of Commissions……
Provisions for expulsion of a partner………

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7
Q

True test of agency

A

Agreement
Sharing of Profit
Mutual Agency

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8
Q

Write about various kinds of Partnership?

A

Partnership for a Fixed Period
Partnership At will
Particular Partnership
General Partnership

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9
Q

Section 7

A

Partnership At will

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10
Q

Actual/Active/Ostensible Partner?

A

By Agreement
Actively Participates
Agent of other partners
Must give a public notice
Liable

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11
Q

Dormant/Sleeping Partner?

A

By Agreement
Does not actively
profits as well as losses
Liable to the third parties
Not required to give public notice

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12
Q

Nominal partner

A

Who lends his name to the firm.
Not entitled to share the profits
Does not make any investment
Take part in the conduct
Liable to third parties

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13
Q

Partner in profits only?

A

Who is entitled to share profits only.
Liable

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14
Q

Incoming partner?

A

Admitted as a partner
Not Liable
Done before the data of his admission

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15
Q

Outgoing Partner

A

Leaves the firm
Liable

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16
Q

Partner by Estoppel/Holding /Holding out

A

Spoken,Written,Conduct
Himself,Permits
To be a partner
Faith, given credit to the Firm
Does, Does not know
The Representation has reached the person
by his words or conduct, allowed others, Partner by estoppe/holding out
Right to enforce liability
Representation has been made acted there upon
Fraudulent intention or not

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17
Q

Section 30

A

Admitted to the benefits

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18
Q

Rights of the Minor in the Firm as per section 30

A

Agreed share of the profits and property
‘Access, inspect, copy.
Settlement of his accounts and payment ‘
elect to become
entitled to the same share
Share is not liable

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19
Q

Section 30(7)

A

When he becomes partner

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20
Q

When he becomes partner

A

Own willingness, failure to give the public notice
Personally liable, Since he was admitted to the benefits
Share in the property and the profits,remains same

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21
Q

Section 30(8)

A

When he elects not to become a partner,

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22
Q

When he elects not to become a partner

A

Continue to be those of a minor
Shall not be liable
Entitled to sue
Notice to the Registrar

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23
Q

Section 29

A

Rights of transferee of a Partner’s Interest’

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24
Q

Rights of transferee of a partner’s interest

A

During the Continuance of Partnership
Transferee is not entitled to
Interfere with the conduct of the business,
Require accounts, or
Inspect books of the firm
Transferee is only entitled to
Receive the share of profits of the transferring partner, and
Bound to accept the profits as agreed to by the partners.
ON he dissolution of the firm or on the retirement of the transferring partner:
Transferee is entitled
Share of the Assets.
Account as from the dte of the dissolution or retirement.

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25
Section 58
Application for Registration
26
The statement will include the following particulars
The Firm's name The Place or Principal place of business of the firm The names of anu other places where the firm carries on business The date when each partner joined the firm The names in full and permanent addresses of the partners and The duration of the firmS
27
Section 59
Completion of Registration
28
Section 69
Non - Registration of Partnership gives rise to a number of disabilities
29
These disabilities briefly are as follows:
No Suit in a civil court by firm or other co-Partners against third party When a third party made a contract with firm and commits breach if contract, Then the following conditions must be satisfied to bring an action against such third party The firm must be registered and The Persons suing have been in the register of firms as partners in the firm 'Thus unregistered firms cannot bring an action against third parties No Relief to partners for set-off of claim Aqqrieved partner cannot bring legal action against another partner or the firm Third Party can sue the firm.
30
Section 9
General Duties of partners
31
General Duties
Greatest common advantage utmost good faith full information of all things affecting the firm Accounts
32
Section 12
Rights and duties of partners regarding conduct of the business
33
Right and duties of partners regarding conduct of the business
Every partner has a right to take part Management powers Co-Extensive Wrongfully precluded Sue for Injection Sue for dissolution books of accounts The court will not interfere partner is restricted Through an agreement
34
Section 12(b)
Duty to act diligently
35
Duty to act diligently
Attend diligently to his duties
36
Section 12(c)
Right to be consulted
37
Right to be consulted
Ordinary matters Decided by majority of the partners Change in nature Consent of all partners is required in either case' Right to express his opinion
38
Section 12(d)
Right of access to books
39
Right to access to books
Every Partner (active/Sleeping) Access to any of the books Inspect and take out a copy
40
Section 12(d)
Right of legal heirs/representatives/their duly authorized agents
41
Right to legal heirs/representatives/their duly authorized agents
In the event of the death of a partner Legal representatives have a right access to any of the books inspect and take out a copy
42
Section 13
Mutual Rights and Liabilities
43
Section 13(a)
Right to remuneration
44
Right to remuneration
Not entitled to receive remuneration However, a partner is entitled to receive remuneration, when there is: Express agreement/course of dealing Continued usage
45
Section 13(b)
Right to share profits
46
Right to share profits
Equally in the profits Equally to the Losses Shares are unequal
47
Section 13(c)
Interest on capita;
48
Interest on Capital
only out of profits' A partner is entitled to interest on capital in the following cases express agreement of continued usage Trade custom satatutory provision Ceases Dissolution
49
Section 13(d)
Interest on advances
50
Interest on advances
@6% pa Keep running
51
Section 13(e)
Right to be indemnified
52
Right to be indemnified
Ordinary and proper conduct' Performance of an act in an emergency situation
53
Section 13(f)
Right to indemnify the firm
54
Right to indemnify the firm
Loss caused to it by his will ful neglect
55
Section 14
The Property of the firm
56
The Property of the firm
All property rights and interests Otherwise known as
57
However, in general 'Goodwill' may be defined as:
Value of reputation expected future profits Over and above the normal level same class
58
Section 16
Personal Profit Earned By Partners
59
Personal Profit Earned by Partner
Any profit Transaction Property or business connection firm name'accounts for pay Subject to contract between the partners, if a partner
60
Section 17
Rights and duties of partners after a change in the firm
61
Rights and duties of partners after a change in the firm
After a change in the firm After the expiry of the term of the firm Where additional undertakings are carried out
62
Section 22
Subject to the provisions
63
Section 19(2)
Acts beyond the implied Authority of the partners
64
Acts beyond the implied Authority of the partner
a)To Arbitration' In his own name 'Compromise of relinquish Withdrawal Admit any liability Acquire immovable property Transfer immovable property Enter into partnership
65
Section (22)
Mode of doing Act to bind firm
66
Mode of doing Act to Bind firm'
The Firm is liable: ACTS DONE INSTRUMENTS EXECUTED' Partner any other person 'firm name' intention to bind the firm
67
Section 21
Authority in emergency
68
SectiSon 23
Effect of Admissions by a partner
69
Section 24
Effect of Notice to an acting partner
70
Section 25
Liability of a partner for acts of the firm
71
Liability of Partners to third parties may be considered under following heads
Liability of a partner for acts of the firm Acts of firm means
72
Section 26
Liability of the firm for wrongful ACTS OF A PARTNER
73
Liability of the firm for wrongful Acts of a partner
Firm is liable' ORDINARY COURSE OF THE BUSINESS authority of the other partners
74
Section 27
Liability of firm for misapplication by partners
75
Liability of firm for misapplication by partner
Two categories of misapplication RECEIVES AND MISAPPLIES misapplies' custody of the firm 'liable in both the cases
76
Section 32
Retirement of an existing partner
77
Retirement of an existing partner

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