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Samacheer Kalvi 11th Commerce Solutions Chapter 5 Hindu Undivided Family and Partnership
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Samacheer Kalvi 11th Commerce Hindu Undivided Family and Partnership Textbook Exercise Questions and Answers
I. Choose the Correct Answer
Samacheer Kalvi Guru 11th Commerce Question 1.
The firm of Hindu Undivided Family is managed by whom?
(a) Owner
(b) Karta
(c) Manager
(d) Partner
Answer:
(b) Karta
Hindu Undivided Family Business Examples Question 2.
In the firm of Hindu Undivided Family, how one gets the membership?
(a) By Agreement
(b) By Birth
(c) By Investing Capital
(d) By Managing
Answer:
(b) By Birth
Question 3.
The members in the joint Hindu family are known as ………………..
(a) Karta
(b) Coparceners
(c) Generations
(d) Partners
Answer:
(b) Coparceners
Question 4.
Only the male members in the family get the right of inheritance by birth as ………………..
(a) Hindu law
(b) Mitakshara Law
(c) Dayabhaga law
(d) None of these
Answer:
(b) Mitakshara Law
Question 5.
partnership is formed by ………………..
(a) Agreement
(b) relationship among partners
(c) The direction of government
(d) Friendship
Answer:
(a) Agreement
Question 6.
Registration of partnership is ………………..
(a) Compulsory
(b) Optional
(c) Not necessary
(d) None of the above
Answer:
(b) Optional
Question 7.
A temporary partnership which is formed to complete a specific job doing a specified period of time is called ………………..
(a) Partnership – at – will
(b) Particular partnership
(c) Limited Partnership
(d) Joint Venture
Answer:
(d) Joint Venture
Question 8.
The partnership deed is also called ………………..
(a) Articles of Association
(b) Articles of Partnership
(c) Partnership Act
(d) Partnership
Answer:
(b) Articles of Partnership
Question 9.
A partnership is registered with ………………..
(a) Registrar of Companies
(b) Registrar of Co – operatives
(c) Registrar of Firms
(d) District Collector
Answer:
(c) Registrar of Firms
II. Very Short Answer Questions
Question 1.
Who is called KARTA?
Answer:
All the affairs of a Joint Hindu Family are controlled and managed by one person who is known as ‘Karta’ or ‘Manager’.
Question 2.
What are the two schools of Hindu law?
Answer:
- Dayabhaga and
- Mitakshara
Question 3.
Who is a called a Partner?
Answer:
The persons who enter into partnership are individually called ‘Partners’.
Question 4.
Who is a Sleeping partner?
Answer:
Such a partner contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.
Question 5.
Who is a Minor?
Answer:
Under the Indian Majority Act, person who has not completed 18 years of age is a minor.
Question 6.
How many types of Dissolution?
Answer:
- Without order of court.
- By order of court.
III. Short Answer Questions
Question 1.
What is the meaning of Joint Hindu Family Business?
Answer:
The Joint Hindu Family Business is a distinct form of organisation peculiar to India. Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members.
Question 2.
Write any 3 features of HUF?
Answer:
- Governed by Hindu Law : The business of the Joint Hindu Family is controlled and managed under the Hindu law.
- Membership by Birth : The membership of the family can be acquired only by birth. As soon as a male child is born in the family, that child becomes a member.
- Liability : Except the Karta, the liability of all other members is limited to their shares in the business.
Question 3.
Explain the nature of liability of Karta.
Answer:
The Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his personal property.
Question 4.
What is the meaning of Coparceners?
Answer:
The members of the Joint Hindu Family business are called Coparceners. It is regulated by the provisions of Hindu Law. According to Hindu Succession Act, 1956, a Coparcener will have a share in the Coparcenaries property after the death of the Co – parcener.
Question 5.
Define Partnership?
Answer:
According to Prof. Haney, “The relations which exist between persons, competent to make contracts, who agree to carry on a lawful business in common with a view to private gain”.
Question 6.
What is the minimum and maximum number of members in the partnership concern?
Answer:
Since partnership is the outcome of an agreement, the minimum number of persons required to form a partnership is two. Maximum is restricted to 10 in the case of banking business and to 20 in all other cases.
Question 7.
What is the meaning of Partnership Deed?
Answer:
Though a partnership agreement need not necessarily be in writing, it is important to have a written agreement in order to avoid misunderstandings; it is desirable to have a written agreement. A carefully drafted partnership deed helps in ironing out differences which may develop among partners and in ensuring smooth running of the partnership business. It should be properly stamped and registered.
Question 8.
Who is called a Secret partner?
Answer:
A secret partner is one whose association is not known to the general public. Other than this distinct feature, he is like rest of the partners in all respects.
Question 9.
What is meant by Joint and Several Liability?
Answer:
Every partner is jointly and severally liable for all acts of the firm. It means that in case the assets are inadequate for meeting the claims of creditors, even their personal properties should be made available. The creditors can recover their claims from all the partners.
IV. Long Answer Questions
Question 1.
What is the implied authority of Karta?
Answer:
1. In a joint family firm, only Karta has the implied authority to enter into a contract for debts and pledge the property of the firm for the ordinary purpose of the business of the firm.
2. The Karta is the senior most male member of the family. The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal with outsiders. But other members can deal with outsiders only with the permission of Karta.
3. Except the Karta, the liability of all other members is limited to their shares in the business. The Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his personal property.
Question 2.
Can a minor be admitted in the Joint Hindu Family business – Why?
Answer:
In a partnership, minor cannot become co – partner though he may be admitted to the benefit of partnership. In a Joint Hindu Family firm even a new born baby can be a partner. The membership of the family can be acquired only by birth. As soon as the male child is born in the family, that child becomes the member.
Question 3.
What are the contents of Partnership Deed?
Answer:
- Name : Name of the Firm.
- Nature of Business : Nature of the proposed business to be carried on by the partners.
- Duration of Partnership : Duration of the partnership business whether it is to be run for a fixed period of time or whether it is to be dissolved after completing a particular venture.
- Capital Contribution : The capital is to be contributed by the partners. It must be remembered that capital contribution is not necessary to become a partner for, one contribute his organising power, business acumen, managerial skill etc., instead of capital.
- Withdrawal from the Firm : The amount that can be withdrawn from the firm by each partner.
- Profit/Loss Sharing : The ratio in which the profits or losses are to be shared. If the profit sharing ratio is not specified in the deed, all the partners must share the profits and bear the losses equally.
- Interest on Capital : Whether any interest is to be allowed on capital and if so. the rate of interest.
- Rate of Interest on Drawing : Rate of interest on drawings, if any.
- Loan from Partners : Whether loans can be accepted from the partners and if so the rate of interest payable thereon.
- Account Keeping : Maintenance of accounts and audit.
- Salary and Commission to Partners : Amount of salary or commission payable to partners for their services. (Unless this is specifically provided, no partner is entitled to any salary).
- Retirement : Matters relating to retirement of a partner. The arrangement to be made for paying out the amount due to a retired or deceased partner must also be stated.
- Goodwill Valuation : Method of valuing goodwill on the admission, death or retirement of a partner.
- Distribution of Responsibility : Distribution of managerial responsibilities. The work that is entrusted to each partner is better stated in the deed itself.
- Dissolution Procedure : Procedure for dissolution of the firm and the mode of settlement of accounts thereafter.
- Arbitration of Dispute : Arbitration in case of disputes among partners. The deed should provide the method for settling disputes or difference of opinion. This clause will avoid costly litigations.
Question 4.
Explain the types of dissolution of partnership firm.
Answer:
Dissolution of Partnership is different from the dissolution of partnership firm. It is due to the fact that when the jurally relation present between all partners, comes to an end, it is known as dissolution of firm, however, when any one of the partners become incapacitated, then the partnership between the concerned partner and other partners of the firm, comes to an end, but the firm may continue to operate, if other partners desire so.
Question 5.
Write any three differences between Dissolution of Partnership and Dissolution of Firm?
Answer:
Dissolution of Partnership:
- In the case of dissolution of partnership, only one or more of the partners terminate their connections with the firm.
- Dissolution of partnership may or may not bring the business of the firm to an end.
- In dissolution of partnership, the business will continue even after dissolution.
Dissolution of Firm:
- Whereas all the partners terminate their connections with the firms in the case of dissolution of firm.
- But dissolution of the firm brings the business of the firm to an end.
- But business cannot be continued in the case of dissolution of firm.
Question 6.
Write the procedure for Registration of a Firing Procedure for registration:
Answer:
A statement should be prepared stating the following particulars.
- Name of The firm.
- The principal place of business.
- Name of other places where the firm carried on business.
- Names and addresses of all the partners.
- The date on which .each partner joined the firm.
- The duration of the firm.
This statement signed by all the partners should be produced to the Registrar of Firms along with the necessary registration fee of Rs.3. Any change in the above particulars must be communicated to the Registrar within 14 days of such alteration.
Samacheer Kalvi 11th Commerce Hindu Undivided Family and Partnership Additional Questions and Answers
I. Choose the Correct Answer:
Question 1.
The liability of partners is………………
a. Limited liability
b. Unlimited liability
c. agreed on ratio
d. non mentioned
Answer:
b. Unlimited liability
Question 2.
……………… is known as individual entrepreneurship.
(a) Partnership
(b) Sole trader
(c) Joint-stock company
(d) Cooperative
Answer:
(b) Sole trader
Question 3.
An agreement in writing duly stamped and registered between persons, to enter into and form a partnership business is called…………..
a. Partnership Deed
b. Partnership Act
c. Contract
d. None of these
Answer:
b. Partnership Act
Question 4.
“He receives all the profits and risks all of his property in the success or failure of the enterprise”- was said by ………………..
(a) Wheeler
(b) J.L. Hansen
(c) H. Haney
(d) O.R. Krishnasamy
Answer:
(a) Wheeler
Question 5.
Indian Partnership Act was implemented in ……………
a. 1922
b. 1932
c. 1942
d. 1952
Answer:
a. 1922
II. Very Short Answer Questions
Question 1.
Write any two examples of Joint Hindu Family business run in India?
Answer:
- Reliance Industries
- Tata Consultancy Services.
Question 2.
Write any two examples of Joint Hindu Family business run in India.
Answer:
Tata Consultancy Services and Haldirams are the top most Joint Hindu family businesses run in India.
Question 3.
What is a partnership firm?
Answer:
The persons who enter into partnership are collectively known as ‘Firm’.
Question 4.
Mention any four kinds of Partners?
Answer:
Active Partner, Sleeping Partners, Partner in Profits only, Partner by Estoppel.
III. Short Answer Questions
Question 1.
Define Partnership:
Answer:
According to section 4 of the Partnership Act, 1932,’ Partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”.
Question 2.
What is a Particular partnership?
Answer:
When a partnership is formed to carry on a particular venture or a business of temporary nature, it is called a particular partnership. In other words, it comes to an end on the completion of the particular venture.
Question 3.
What is meant by Mitakshara Law?
Answer:
According to Mitakshara law, only the male members in the family get the right of inheritance by birth. It is applied throughout India except Assam and West Bengal.
Question 4.
What is meant by Dayabhaga Law?
Answer:
According to Dayabhaga Law, the right of property develops on the Coparceners by succession and not by birth. The share in the property is not fluctuating on the basis of births and deaths. The share are specified prior to partition. The coparceners can alienate their share of property given without the concern of their coparceners.
IV. Long Answer Questions
Question 1.
What are the drawbacks of the Non-registration of a partnership firm?
Answer:
The following are the drawbacks of Non- registration of a partnership firm:
- No right to file suit against others; An unregistered firm cannot file a suit to enforce its claims against third parties if such rights arise õut of a contract.
- Right to sue for right arising; However, it can sue others for enforcing rights arising otherwise than out of a contract. For example, it can bring a suit for wrongful infringement of trademark or the patent.
- Right of third parties to sue the firm; The rights of third parties against the firm are not affected by non-registration. It means that they can sue the firm or any of its partners
Question 2.
What are the circumstances under which a partnership firm is dissolved? (any five)
Answer:
- By agreement or mutual consent: A firm may be dissolved when all the partners agree to close the affairs of the firm. Just as a partnership is created by contract, it can also be terminated by contract.
- By insolvency of all the partners but one: If any of the partners adjudged an insolvent (or if all the partners become insolvent) it is necessary to dissolve the firm.
- Business becoming unlawful: When the business carried on by the partnership becomes illegal, the partnership firm is automatically dissolved.
- By notice of dissolution: In the case of partnership at will when any partner gives in writing to all the other partners indicating his intention to dissolve the firm, the firm will be dissolved.
- Continued loss: If the business of the firm cannot be continued to expect at a loss, the same may be dissolved by the court on application by a partner.
Question 3.
Limited Liability Partnership (LLP).
Answer:
Limited Liability Partnership is very popular in the service sector and in small-scale business enterprises. Limited liability partnership means for paying the debts of the firm only the assets of the business will be utilized and not the personal properties.
It is prevalent among popular professionals such as Cost Accountants, Company Secretaries, Chartered Accountants, Lawyers, Architects, Engineers, and Doctors. Limited Liability Partnership is available in countries like U.S.A, Singapore, Thailand, and the U.K. It came into existence in India in 2008.
Case Study
Question a.
A father had self-acquired agricultural land. He transferred the said land in the name of his three sons. The revenue records reflect the names of the three sons with 1/3rd share against each name. Father died recently. However physical partition of the said land amongst the three brothers has not been done as they have mutually decided against it. The eldest son has started managing the land since his father’s demise. Is the land in question ancestral property of the three brothers? Can the three brothers claim to a HUF? If yes, then when are they HUF – after father’s demise or since the date land transferred in their names?
Answer:
Yes, the land is the ancestral property of the three brothers. It is their father’s land. The three brothers can claim to a HUF. After their father’s death, they can get the land transferred in their names.
Question b.
Draw a family tree diagram as you think. Just imagine you are running a business under the Joint Hindu Family system.
Answer:
For Future Learning
Question a.
Raman with members of his extended family established a Joint Hindu Family business of Handicrafts. Raman being the head of family-controlled the business as ‘Karta’. He had the authority to make all decisions for the business. Many times, he sold goods for cash without informing other members of the family business. This resulted in lesser profits. He also sold one of the family properties and gave money to his daughter as a wedding gift. What values did Karta ignore in the above case?
Answer:
- Unlimited liability
- No consultation with family members.
- Quick decision-making.
- Hasty decision.
Question b.
Palani is an Electronics Engineer. He has met two businessmen who wish to enter into a partnership with him for the manufacture of tape-recorders. They are prepared to make the investment and offer a fourth share in profits to Palani. Would you have any special words of advice for Palani?
Answer:
Palani is a working partner. He knows the field of product manufacturing of tape recorders. So he is an expert in the business.
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