Partnership: Nature & Existence

Partnership as defined under section 3(1) of Partnership Act 1961 consists the followings characteristics:

• relation

• persons

• carrying on business

• in common

• view of profits

Persons which refers to numbers in ordinary firms and professional firms can be up to _____

• Ordinary - 20 Professional - 50

• Ordinary - 2 Professional - 2

• Ordinary - 50 Profesional -Unlimited

• Ordinary - 20 Professional - Unlimited

The word carrying on means _____.

• There must be an agreement to set up a business

• The business must be in existence & operating

• There must be a business ideas

• All partners must involve in the management of the business

All occupations, trade and profession are considered as partnership

• TRUE

• FALSE

Valid partnership exist even though not all partners take part in the management of the partnership.

• TRUE

• FALSE

Societies like Pertubuhan Kasih Umat Malaysia (PKUM) & Persatuan Cinta Gaza (CGM) can be considered as a partnership.

• TRUE

• FALSE

Is there any existence of partnership in case of joint ownership (tenancy in common) and sharing of gross return?

• YES

• NO

Which of the following circumstances under section 4(c) of Partnership Act 1961 may rebut the existence of partnership in case of sharing of net profits?

• payment of debts and interest to the creditor

• payment of salary to workers

• Payment of annuity to a widow of a deceased partner

• Payment of goodwill

Payment of goodwill made to the previous owner of a business by using firm's profits will automatically treat the previous owner as a partner.

• True

• False

Partnership does exist when the business is carried out with different activities which is not performed on behalf of the other partner.

• True

• False