Ch:3 Partnership Flashcards
Q1 Why the need of partnership business was felt.
This type of business organization was introduced due to the following
deficiencies of soletradership:
(i) Shortage of capital
(ii) More burden of loss
(iii) Failure of managing business affairs
Q2. Define partnership.
The relation between persons who have agreed to share the profits of a business
carried on by all or any one of them acting for all.
(Partnership Act 1932)
Q3. Narrate any three important points from the definition of partnership.
i) Partnership shows a business relationship between persons.
(ii) The main object of the business is profit.
(iii) Business may be carried by all or any one of them acting for all.
Q4 State any five properties of the partnership business.
There are following properties of the partnership business:
(i) Un-limited liability
(iii) Mutual cooperation
(ii) No separate legal entity
(iv) Partner as agent
v) division of profit and loss
Q5 State any five advantages of partnership.
There are following advantages of the partnership:
(i) Larger capital
(ii) Mutual consultation
(iii) Division of work
(iv) Credit facility
(v) Services of experts
Q6 State any five disadvantages of partnership.
There are following disadvantages of the partnership:
(i) Unlimited liability
(iii). Delay in decisions.
(ii) Uncertainty
(iv) Personal disputes
v) Lack of secrecy
Q7. List out the types of partnership.
There are following four kinds of partnership:
(i)Partnership for fixed period
(ii) Partnership at will
(iii) Limited partnership
(iv) Particular partnership
Q8 What is meant by partnership at will.
When no provision is made in partnership agreement for the duration of partnership then the partnership is called partnership-at-will. This partnership may continue till the mutual consent and trust prevail among the partners.
Q9. What is meant by limited partnership.
In Pakistan, limited partnership is formed under Limited Liability Partnership Act 2017, which consists of 55 sections, 13 parts and 3 schedules. The registration of limited partnership is compulsory by law. The name of limited liability partnership shall appear in legible letters on its seal, all business letters and statements of account etc.
Q10. Write down the forms of partnership under Islamic laws.
i)Shirkat-ul-Mufavda
(iii) Shirkat-ul-Wajooh
(ii) Shirkat-ul-Anan
(iv) Shirkat-ul-Taqabal
Q11 Shirkat-ul-Anan.
1)The share of partners in capital may be different.
2)The profit or loss of business shall be distributed according to the capital
contributed by the partners.
3)The partners are allowed to contribute capital inform of cash only.
Q12. What is meant by Shirkat-ul-Wajooh.
(i) In this partnership, no partner brings capital.
(ii) This partnership may be started by taking loan or purchasing goods on
credit.
(iii) Profit or loss of the business is distributed among the partner on the basis of
their loans taken for the business.
Q13. Define partnership deed.
Partnership deed is a document, which contains all necessary rules and regulations
required to run the partnership business.
Q14.
Which one is the best option/form of partnership agreement.
The best form of partnership deed is that it must be written registered and signed by the all partners, so that partners can know their rights and duties.
Q15. List down the main points of partnership deed.
There are following main points of the deed:
(i)Name of firm
(ii)Nature of business
(iii) Duration
(iv)Capital
(v) Division of profit and loss
(vi) Rights and duties of partner
(vii) Name of the partners
(viii) Division of work
Q16.
Who is minor partner.
Minor partner means a partner whose age is less than 18 years. A minor partner may become a partner of the business with the consent of all the other partners.
Q17. Define senior partner.
Senior partner means a partner who has invested large capital and is playing
important role in the management according to his ability and experience. His ratio of profit or loss is also more than other partners.
Q18.Who is a junior partner.
Junior partner means a partner who has invested small capital and has a limited.
experience of business. His ratio of profit and loss is also less as compared to other partners.
Q19. Define Sleeping Partner.
If any person invests his capital in the business and responsible for profit & loss but does not participate in the working of the business, he is called non-active or sleeping or dormant partner.
Q20. What is a meant by nominal partner.
Nominal partner is a partner who neither invests capital nor shares the profit or loss of the firm. He also does not participate in the management of a firm. A firm only uses the name and good reputation of this partner.
Q21. State the duties of partners.
i) Sincere and faithful
(ii) Work for common advantage
(iii) To abide by the decision of majority
(iv) To abide by the agreement
(v) To keep secrecy.
(vi) Maintenance of true account
Q22-State the rights of the partners.
(i) Right of profit
()Right of exercising powers
(iii) Right of management
(iv)Right of inspection
(v) Right of opinion
(vi)Right of retirement
Q23.
State the liabilities of partners.
i) Joint liability
(ii)Liability of a new partner
(iii) Liability of retired partner
(iv)Liability of deceased partner
(v) Liability of insolvent partner
Q24
Define the registration of partnership.
Registration means a proof of existence of partnership business or firm. The
process of recording the name of firm with the registrar of firm is called the
registration of firm.