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PARTNERSHIP TEST

1. Which of the following is true about a minor? a) A minor cannot be a partner in a firm. b) A minor cannot repudiate a partnership contract once entered on his behalf. c) A minor can be a partner in a firm until he disaffirms the partnership. d) A minor may incur contractual liability for partnership debts. 2. Which of the following statements is correct? a) Every partner is an agent of the firm. b) Only active partners are agents of the firm. c) Dormant partners are not agents of the firm. d) Every partner binds the firm in all his / her actions. 3. Which of these is true? a) A partnership is a corporate body. b) A partnership cannot own property. c) A partnership may be sued with its partners d) A partnership has no perpetual succession. 4. Persons who enter into partnership with one another are collectively called; a) A partnership. b) A company. c) A partner. d) A firm. 5. Which of the following is false? a) A general partner has unlimited liability. b) A general partner may have his personal properties attached to settle partnership debts. c) A limited partner can never be allowed in a partnership. d) A limited partner cannot be held liable for the firms obligation beyond the amount contributed. 6. A partnership shall be dissolved by aid of Court: a) at the expiry of its fixed term. b) when it becomes illegal to carry on the business of the firm. c) when one partner gives notice to dissolve the partnership. d) when one partner becomes insane.

7. Goodwill is: a) An attractive force which brings customers to a business and legally amounts to consideration. b) A benefit or advantage that curves to a business when it closes and legally amounts to consideration. c) An interest the partners have in business and legally amounts to consideration. d) An interest customers have in business and legally amounts to consideration. 8. Which of the following is correct? a) Partners are paid for acting in a partnership business. b) No partner is entitled to remuneration for acting in a partnership business. c) A partner may pay himself for acting in a partnership business. d) All partners are paid equally for acting in the partnership business. 9. Holding out refers to; a) Conducting oneself in a manner that third parties believe that one is in a partnership b) Conducting business with a view to deceive third parties that one is in a partnership c) Conducting business with a view to representing other partners in an partnership d) Conducting oneself in a manner that third parties may believe the partners interest is on sell 10. a) b) c) d) 11. a) b) c) d) Partners may expel any partners from a partnership when; The partner is insane The partner is bankrupt The partner breeches the partnership deed The partners have an express agreement to that effect The benefit; advantage or connection of a business is known as; Profit Assets Goodwill Interest in a firm

12. The day to day running of a partnership is governed by: a) Articles of association.

b) Partnership Act. c) Partnership deed. d) Memorandum of association. 13. A partner who participates in the management of the firm is called? a) A dormant partner. b) A general partner. c) A partner by holding out. d) A Corporate partner. 14. Which of these is true? a) A partnership is a company. b) A partnership is based on agency. c) A company is a partnership. d) A company is based on agency. 15.
a)

b) c) d)

Which of these is not a characteristic of a partnership? Limited liability. Unincorporated status. Informality. Based on agency.

16. The partner who does not actively participate in the management of the partnership is called: a) a general partner. b) a dormant partner. c) a dominant partner. d) a holding out partner. 17. a) b) c) On what grounds will Court dissolve a partnership? When the venture is terminated. When one partner is incapable of performing responsibilities. When one partner runs bankrupt. d) When an illegality occurs. Which of the following is false about a partnership? It has incorporated status. It is based on agency principle. It has no perpetual succession. It has limited liability.

18.
a)

b) c)
d)

19. A partner by Holding Out is: a) A partner who actively participates in business. b) A partner who may be adjudged a partner for particular purposes on the doctrine of estoppel. c) A partner who has the majority shareholding in a partnership. d) A partner who has special immunity from liability suffered by other partners. 20. Which of the following circumstances may lead to dissolution of a partnership by court? a) Expiration of a fixed term. b) Bankruptcy of one partner. c) Insanity of one of the partners. d) Illegality. 21. a) b) c) Which of the following is true? The partners in a firm are only jointly liable for the wrongs of the firm. The partners in a firm are only severally liable for the wrongs of a firm. The partners in a firm are severally and jointly liable for the wrongs of a firm. d) The partners in a firm are never liable for the wrongs of a firm.

22. The principle within which partners are given freedom to change the nature of partnership is explained by: a) Jus dipositivum. b) Uberimma fides. c) Bona fide. d) Ultra vires. (xx) A is someone deemed to be a partner for particular purpose: through the doctrine of estoppel. a) partner by holding out. b) sleeping partner. c) general partner. d) representative of a partner. (xx) Which of the following is a characteristic of a partnership? a) Perpetual succession. b) It can be dissolved by the death of one of the partners. c) Limited liability. d) Separate personality from owners.

23. Which set below explains two concepts that govern internal relationship of partners? (i) Freedom of partners to collectively change the nature of the partnership. (ii) Majority decision does not determine the affairs of partnership. (iii)Utmost good faith. (iv) Partnership does not operate on contract principles. a) (ii) and (iv). b) (ii) and (iii). c) and (iii). d) and (iv).
24. Which of the following may NOT define a partnership?

a) It is based on agency. b) It has unlimited liability. c) It has incorporation status. d) It can be formed informally. 25. Which of the following is a characteristic of a partnership? a) Limited liability. b) Informality. c) Perpetual succession. d) Incorporation. 26. The relationship which subsists between people doing business together with intention to profit is: a) agency. b) partnership. c) company. d) sole trader. 27.
a)

b) c) d)

The rights and obligations of partners is set out in the: Partnership deed. Articles and Memorandum of Association. Partnership Act and Articles of Association. Memorandum of Association.

28. Which of the following is NOT a method of dissolution of a partnership other

than by court? a) Expiration of time or duration. b) Notice. c) Illegality.

d) Insanity. 29. The partner who does not actively participate in the management of the partnership is called a: a) general partner. b) dormant partner. c) dominant partner. d) holding out partner. 30. Which of the following statements are true about a partnership? (i) The partners may on their own agree to dissolve the partnership. (ii) The bankruptcy of any partner automatically dissolves the partnership. (iii)The illegality of a partnership dissolves it. a) and (ii). b) and (iii). c) and (i). d) (i), (ii) and (iii). 31. a) b) c) d) The law of partnership is governed by the: Partnership Deed. Partnership Act. Protectorate Law of England. Laws of Uganda.

32. Which of the following is FALSE about the rights of partners in a firm?

a) Sharing capital, profits and losses of the business equally. b) To be indemnified by the firm for any liabilities incurred in the ordinary course of business. c) Taking part in the management of the business on part-time basis. d) Having access to the firms books. 33. In order to prove the existence of a partnership, the following elements must concur: (i) There must be business. (ii) The business must be carried on in common. (iii)The business must be carried on with a view of making and sharing profits. a) and (ii) b) and (iii) c) (ii) and (iii) d) (i), (ii) and (iii)

34. Which of the following is NOT found in a partnership deed?

a) b) c) d) 35. a) b) c) d) a) b) c) d)

The names of the directors. The names of persons to be partners. The nature and place of business and the name of the firm. How profits and losses are to be shared. .. applies to a partnership. Based on agency Limited liability Incorporation status Informal formation It can be dissolved by consent of all partners. Death of a partner may lead to its dissolution. May be formed by informal agreement. It has perpetual succession.

36. Which of the following is NOT correct about a partnership?