Business Law MCQ on Reconstitution and Dissolution of Firm: Check the below Business Law MCQ on Reconstitution and Dissolution of Firm with Answers Pdf free download. Business Law MCQ on Reconstitution and Dissolution of Firm Questions for Business Law with Answers were prepared based on the latest exam pattern. We have provided Business Law MCQ on Reconstitution and Dissolution of Firm with Answers to help students understand the concept very well.

Business Law MCQ on Reconstitution and Dissolution of Firm

1. Retiring partner continues to remain liable to third parties for acts of the firm:
(a) Until public notice is given of the retirement
(b) From the date of retirement
(c) Upto the close of the financial year in which he retires
(d) So long as the firm uses his name

2. A retired partner may be liable:
(a) For debts incurred before retirement.
(b) For debts incurred after retirement until public notice is given.
(c) Either (a) or (b)
(d) Both (a) and (b)

3. A partner may not be expelled from the firm by any majority of partners unless:
(a) The terms of partnership agreement confer the power to expel a partner
(b) The expulsion is made by a majority of the partners of the firm
(c) The decision of expulsion is made by all the partners in good faith
(d) All the above

4. A partner can be expelled from a firm:
(a) If power to expel is conferred by express agreement
(b) If the power is exercised in good faith
(c) By majority of partners after giving oppor¬tunity of explanation
(d) All of the above

5. Agreement in restraint of trade is void. But if an outgoing partner agrees with the firm that he will not carry on any competing business, such an agreement will be valid if:
(a) Such restraint is in respect of carrying of any business similar to that of the firm
(b) Such agreement is made by the partners beforehand i.e. well in advance
(c) Such agreement is made without any specific reference to time period
(d) Such agreement is made without reference to local limits

6. If all partners, or all but one partner, of the firm are declared insolvent __________.
(a) Firm is automatically dissolved
(b) Firm becomes illegal association
(c) Firm is also declared insolvent
(d) Firm becomes illegal entity

7. A notice in writing by one partner must be given to all the partners of the firm in case of:
(a) Dissolution on the happening of contingencies
(b) Dissolution of partnership at will
(c) Dissolution by court
(d) Compulsory dissolution

8. Dissolution of partnership between all the partners of a firm is called _______.
(a) Dissolution of partnership
(b) Dissolution of partners
(c) Dissolution of the firm
(d) Reconstitution of firm

9. A firm is compulsorily dissolved _______.
(a) By adjudication of any partner of the firm as insolvent
(b) By the death of a partner
(c) By adjudication of all the partners or of all the partners but one is insolvent
(d) In any of the above circumstances

10. Public Notice under the Partnership Act, is given in the following manner:
(a) Serving a copy of the Notice to the Registrar of firms
(b) Publishing the Notice in the Official Gazette
(c) Publishing the Notice in one vernacular newspaper circulating in the district where the firm’s principal place of business is situated
(d) All of the above

11. The partners authority to act for the firm and to bind their co-partners continues even after the dissolution of the firm:
(a) To wind up the affairs of the firm
(b) To complete the unfinished transactions
(c) Both of above
(d) None of the above

12. While selling goodwill of the firm, the selling partners may agree with the buyer that they will not carry on similar business, within a specified period or within specified local limits. Such agreement in restraint of trade shall be :
(a) Valid, if the restrictions imposed are rea-sonable
(b) Valid (whether restrictions are reasonable or not)
(c) Void
(d) Voidable

13. No public notice is required:
(a) On the death of a partner
(b) On minor attaining majority
(c) Retirement of partner
(d) Dissolution of firm

14. An outgoing partner can carry on a competing business and also advertise such business. For this purpose, in the absence of contract to the contrary _______.
(a) He can use the firm’s name
(b) He cannot use the firm’s name
(c) He cannot represent himself as carrying on the business of the firm
(d) Both (b) and (c)

15. Which of the following conditions is not necessary for expulsion of a partner?
(a) The power of expulsion must be given in the partnership deed
(b) Such power has been exercised by a majority of the partners
(c) Such power has been exercised in good faith for the interest of the firm and not used as vengeance against a partner
(d) An FIR has been filed in the Police Station

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By Team Learning Mantras