Business Regulatory Framework (Mercantile Law) (301)

Multiple Choice Questions 42 Pages
University Savitribai Phule Pune University
Course Bachelors in commerce

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Prajwal Hallale
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  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    TERM I
    Unit 1. - Law of Contract - General Principles.(Indian Contract Act, 1872)
    1. The Indian Contract Act, 1872 is dividend into….. Chapters.
    a) 3
    b) 8
    c) 10
    d) 12
    2. When is the communication of proposals, the acceptance of proposals and the revocation of
    proposals deemed to be made:
    a) Only on clear verbal communication of such proposal, acceptance or revocation
    b) By any act or omission of the party by which he intends to communicate such proposal,
    acceptance or revocation or has the effect of communicating it
    c) Only when the proposal, acceptance or revocation of the proposal is recorded in writing
    d) Only when the proposal, acceptance or revocation of the proposal is received and understood
    by the other party receiving the information
    3. Which of the following feature is not essential for a contract:
    a) It should be in writing only
    b) free consent of parties competent to contract
    c) lawful consideration and with a lawful object
    d) It should not be declared void expressly
    4. Who among the following is not competent to contract:
    a) Person who has acquired the age of 18
    b) Person who has acquired the age of 16
    c) Person is of sound mind
    d) Person who is disqualified from contracting by any law

    Page 1

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    5. What is consent under the Indian Contract Act, 1872:
    a) When acceptance of proposal is made by the party to whom the proposal is made
    b) When the acceptance is made by another person other than the person to whom the
    proposal is made
    c) When they agree upon the same thing in the same sense
    d) When both the parties agree upon a thing in the way it is understood by them
    6. Every promise and every set of promise forming the consideration for each other is a/an
    a) Contract
    b) Agreement
    c) Offer
    d) Acceptance
    7. A promises to deliver his watch to B and, in return, B promises to pay a sum of Rs. 2,000. This
    is a/an
    a) Agreement
    b) Proposal
    c) Acceptance
    d) Offer
    8. A contract or an obligation to perform a promise could arise by
    a) Agreement and Contract
    b) Promissory Estoppel
    c) Standard form of contracts by promise
    d) All of the above
    9. Valid Contracts
    a) Are made by free consent
    b) Are made by competent party
    c) Have lawful consideration and lawful object
    d) All of the above
    10. A contract creates
    a) Rights and obligations of the parties to it
    b) Obligations of the parties to it
    c) Mutual understanding between the parties to it
    d) Mutual lawful rights and obligations of the parties to it.

    Page 2

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    11. An offer and its acceptance is the basic requirement of an agreement and as per this
    requirement, an offer by one party
    a) Should be made to the other who is related to him
    b) May also be made to himself
    c) Should be made to another who may or may not be related to him
    d) Should be made to another before the Registrar
    12. Contracts with an alien friend, subject to certain restrictions are
    a) Void
    b) Unenforceable
    c) Valid
    d) Invalid
    13. Undue influence is a kind of
    a) Mental
    b) Physical
    c) Both (a) and (b)
    d) None of the above
    14. …….. Is an erroneous belief about something?
    a) Representation
    b) Mistake
    c) Fraud
    d) Misrepresentation
    15. The damages awarded by way of punishment are called
    a) Special Damages
    b) Ordinary Damages
    c) Exemplary Damages
    d) Nominal Damages
    16. Which of the following is not a necessary feature to convert a proposal into a promise:
    A. The acceptance must be absolute
    B. The acceptance must be within the prescribed time limit
    C. The acceptance must be conditional
    D. The acceptance must be expressed in some usual and reasonable manner

    Page 3

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    17. In an executed contract, the obligation of ________:
    A. both the parties have been fulfilled
    B. both the parties are outstanding
    C. obligation of one party is outstanding
    D. none of these
    18. A contract with or by a minor is a:
    A. valid contract
    B. void contract
    C. voidable contract
    D. voidable at the option of either party
    19. The term consideration is defined in __ section of the Indian Contract Act, 1872.
    A. 2(a)
    B. 2(d)
    C. 3(a)
    D. 2(h)
    20. An agreement & contract are one and same thing:
    A. True
    B. False
    C. Depends on the situation
    D. None of these
    21. Two persons have the capacity to contract:
    A. If both are not of unsound mind
    B. If none is disqualified from contracting by any law to which he is subject
    C. If both have attained the age of maturity
    D. All of the above
    22. A contract can be performed by:
    A. promisor himself
    B. agent of the promisor
    C. legal representative of the promisor
    D. either of these three

    Page 4

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    23. In a contract not specifying the time for performance, the promisor can perform the contract:
    A. immediately
    B. within the shortest time
    C. within a reasonable time
    D. within next 21days
    24. When the consent of a party is not free, the contract is:
    A. void
    B. voidable
    C. valid
    D. illegal.
    25. In Case of Illegal agreements, the collateral agreements are:
    A. valid
    B. void
    C. voidable
    D. any of these.
    26. A agrees to sell his car worth ` 1,00,000 to B for ` 20,000 only and A’s consent was obtained by
    coercion. Here, the agreement is:
    A. void
    B. valid
    C. voidable
    D. unlawful.
    27. Contract caused by which of following is voidable?
    1. Fraud
    2. Mis-representation
    3. Coercion
    4. Bilateral Mistake
    A. 1, 2, 3
    B. 2, 3, 4
    C. 1, 2, 4
    D. 1, 2, 3, 4

    Page 5

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    28. An insurance contract is
    A. Contingent contract
    B. Wagering agreement
    C. Unenforceable contract
    D. Void contract
    29. Agreement is defined in section of the Indian Contract Act, 1872.
    A. 2(c)
    B. 2(e)
    C. 2(g)
    D. 2(i)
    30. Every Contract is an agreement but every agreement is not a contract. This statement is -
    A. Wrong
    B. Correct
    C. Correct Subject to certain exceptions
    D. Partially correct.
    Answer Key
    1
    2
    3
    4
    5
    6
    7
    8
    9
    10
    11
    12
    13
    14
    15
    C
    B
    A
    B
    C
    B
    A
    D
    D
    D
    C
    C
    A
    B
    C
    16
    17
    18
    19
    20
    21
    22
    23
    24
    25
    26
    27
    28
    29
    30
    C
    A
    B
    B
    B
    D
    D
    C
    B
    B
    C
    A
    A
    B
    B

    Page 6

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    Unit 2. - Law of Partnerships
    31. A partnership firm comes into existence by agreement between all the partners, and such
    agreement should be
    a) Express agreement only.
    b) Implied agreement only.
    c) Either express or implied.
    d) Registered
    32. A partnership deed usually contain the particulars relating to
    a) Name of firm and partners.
    b) Nature of business and duration of firm.
    c) Capital contribution, profit/loss sharing ration and other agreed terms.
    d) All of these.
    33. Can a company become a partner in a firm?
    a) Yes, as the company is regarded as person in legal sense of the term.
    b) No, as the partnership is an association of natural persons only
    34. A partner is the agent of the firm for the business of the firm
    a) True, as the mutual agency relationship is the foundation of the law of partnership.
    b) False, as in that case a firm is reduced to the status of a mere agency.
    35. Which of the following statement about a minor partner is incorrect?
    a) A minor can be admitted only to the benefits of an existing firm.
    b) A minor cannot be admitted to the benefits of a new firm taking minor as partner.
    c) A minor cannot be a full-fledged partner in a firm.
    d) A minor can be a full-fledged partner in a firm
    36. A partnership where its duration is fixed and cannot be dissolved by any partner at his will, is
    known as
    a) Particular partnership
    b) General partnership
    c) Partnership for fixed period
    d) Partnership at will

    Page 7

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    37. Which one of the following is an unincorporated organisation?
    a) General partnership.
    b) Public limited company.
    c) Limited liability partnership.
    d) Private limited company.
    38. The maximum number of persons who are legally allowed to operate in a partnership is:
    a) 2
    b) 20
    c) There is no legal limit
    d) 100
    39. A partner who is entitled to a share of the profits from a partnership is known as:
    a) A salaried partner.
    b) A managing partner.
    c) An equity partner.
    d) A limited liability partner.
    40. Which one of the following statements about limited liability partnerships (LLPs) is incorrect?
    a) An LLP has a legal personality separate from that of its members.
    b) The liability of each partner in an LLP is limited.
    c) Members of an LLP are taxed as partners.
    d) A limited company can convert to an LLP.
    41. An organisation running a business has the following attributes: the assets belong to the
    organisation, it can create a floating charge over its assets, change in membership does not
    alter its existence, and members cannot transfer their interests to others. What type of
    organisation is it?
    a) A private limited company
    b) A limited liability partnership
    c) A general partnerships
    d) A private limited company

    Page 8

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    42. What is the partnership written agreement known as?:
    a) Partnership contract
    b) Agreement
    c) Partnership deed
    d) Partnership Act
    43. Which is not a feature of a partnership business?
    a) Ease of formation
    b) Limited liability
    c) Limited life
    d) Mutual agency
    44. Which kind of partnership one partner has unlimited liability and other partner have limited
    liability?
    a) Partnership-at-will
    b) Limited partnership
    c) General partnership
    d) Particular partnership
    45. Which types of partnership have no agreement in terms of the duration of partnership?
    a) Partnership-at-will
    b) Limited partnership
    c) General partnership
    d) Particular partnership
    46. The LLP Act, 2008 came into force from:
    a) 31st March, 2008
    b) 31st March, 2009
    c) 1st April, 2008
    d) 1st April, 2009
    47. Maximum number of partners in a LLP can be:
    a) 100
    b) 200
    c) 50
    d) Unlimited

    Page 9

  • DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE45
    Subject – Business Regulatory Framework Class : TYB.COM (2013 Pattern)
    (Mercantile Law) (301)
    PROF . SWATI BHALERAO www.dacc.edu.in
    48. DPIN Stands For
    a) Designated Partner Identification Number
    b) Director Personal Identification Number
    c) Director and Partner Identification Number
    d) Direct Partner Identification Number
    49. LLP shall be Taxed Under Income Tax Act,1961 As of
    a) Partnership Firm
    b) Company
    c) Association of person
    d) HUF
    50. Minimum Number of Partner in LLP
    a) 1
    b) 2
    c) 3
    d) 4
    51. Who cannot become partner in LLP
    a) Person has been found to be unsound mind.
    b) Person is an undischarged insolvent.
    c) Person has applied to be adjudicated as an insolvent.
    d) All of above
    52. A Person shall cease to be a partner of LLP
    a) On receiving advance from LLP
    b) On giving advance to LLP
    c) On his death
    d) After completing age of 60 years
    53. Partner of LLP is personally liable in case of
    a) Liabilities of LLP
    b) Personal liability of other partner
    c) His own personal liability
    d) Wrongful act or omission of any other partner

    Page 10

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