Why is it considered better to make a partnership agreement in writing?
It is always better to have a written agreement to avoid any dispute. It is a legal document and can be served as evidence in court if a dispute arises.
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X and Y are partners. y wants to admit his son K into business. Can K become the partner of the firm without the consent of X?
No in the absence of a written partnership Deed. The consent of all the partners is required to admit a new partner. Thus K can not be admitted. But if there is a partnership deed with a written agreement Y…
Neha, a partner, owns a building from where the firm carries its business. The firm pays her ₹ 10,000 as the rent for the building. Will it be transferred to Profit & Loss Account or Profit & Loss Appropriation Account? Why?
Rent to the Partner is considered a charge against Profit. Thus it would be recorded at the debit side of Profit and Loss Account. Note:- Charge against profit are the expense that is to be paid by the firm irrespective…
Distinguish between ‘Fixed Capital Account’ and Fluctuating Capital Account’ on the basis of credit balance.
Fixed Capital account always has credit balance Whereas, the Fluctuating Capital Account may have credit or debit balance
A group of 40 People wants to form a Partnership Firm. They want your advice regarding the maximum number of persons that can be there in a partnership firm and the name of the act under whose provisions it is given.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
Is there any restriction on the maximum number of partners? if yes, name the act under which it is prescribed.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
State any two essential features or characteristics of the Partnership other than a minimum number of partners and profit sharing.
The following are the two characteristics. Agreement:- The partnership comes into existence through an agreement, either written or oral. It is the basis of a relationship among partners, which may be for a particular venture, for a period, or at…
What is the maximum number of Partners that a partnership firm can have? Name the Act that provides for the maximum number of partners in a partnership firm.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
Does Partnership firm has a separate legal entity? Given reason in support of your answer.
No, the Partnership firm does not have a separate legal entity from its partners. Since the firm’s debts are payable from the personal assets of the partners if the firm is unable to repay its liabilities.
Assertion (A): Partnership is a separate and distinct entity from partners from the viewpoint of accounting.
Ans – b) As per Business Entity Concept, the partnership firm is a separate entity from partners from the viewpoint of accounting. Thus all business transactions are recorded from the business point of view. For example when capital is introduced…