CAIIB · Banking Regulations & Business Laws · Module D — Commercial & Other Laws with Reference to Banking Operations
CAIIB BRBL Unit 27 — The Indian Partnership Act, 1932 (Units 27A–27F): Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper IV of the December 2026 cycle (Sunday 20 December 2026)
This is the free practice page for CAIIB BRBL Unit 27 — The Indian Partnership Act, 1932 (Units 27A–27F) (Module D — Commercial & Other Laws with Reference to Banking Operations). The CAIIB Mock Centre holds 240 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five practice questions with explanations, and the traps that cost marks.
BRBL · Module D240 MCQs in the Mock Centre5 free belowPaper on 20 December
Key facts examiners test from this unit
Nature of a partnership — partnership is the relation between persons who agree to share the profits of a business carried on by all or any of them acting for all; it arises from contract, and the firm is not a legal person.
Partners' mutual relations — partners owe utmost good faith; unless agreed otherwise, no salary, equal shares, 6% on advances, and personal profits from the firm go to the firm.
Partners and third parties — a partner binds the firm by acts in its usual business done in its name; partners are jointly and severally liable; anyone held out as a partner is liable to those who gave credit.
Changed since the textbook
Beneficial owner of a partnership firm: more than 10% (4 Sep 2023). The Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2023 (G.S.R. 652(E), 4 September 2023) lowered the beneficial-ownership threshold for a partnership firm from 15% to 10%: a natural person who, alone or together, has ownership of or entitlement to more than 10% of the capital or profits of the partnership, or who exercises control through other means, is a beneficial owner whose identity the bank must verify. Source: Taxmann
LLP (Amendment) Act, 2021 (1 Apr 2022). The Limited Liability Partnership (Amendment) Act, 2021, in force from 1 April 2022, reduced the stay needed for a designated partner to count as 'resident in India' from 182 days to 120 days in the financial year, introduced small LLPs and start-up LLPs, and moved many minor offences to in-house adjudication with monetary penalties. Source: India Briefing
5 free practice questions — tap an option
Five practice questions from this unit. Answers lock on the first tap, exactly as in the exam, and an explanation opens underneath. The Mock Centre has all 240 questions on this unit, from easy to tough, with caselets and key-in numericals, why every other option is wrong and the exam tip — and tracks your score and revision dates.
Question 1 of 5
If a dissolution notice under Section 43 names no date, the firm is dissolved from:
Why (b): Section 43(2): from the date the notice is communicated, if no date is mentioned. (a) is wrong: Signing or posting is not communication. (c) is wrong: No year-end rule applies. (d) is wrong: It depends on communication.
Question 2 of 5
A partner earns a secret commission from a supplier on the firm's order. He must:
Why (d): Section 16(a): profit from a firm transaction must be paid to the firm. (a) is wrong: Reporting alone is not enough. (b) is wrong: A secret profit belongs to the firm. (c) is wrong: All of it goes to the firm.
Question 3 of 5
A minor may be admitted to the benefits of partnership with the consent of:
Why (b): Section 30(1): with the consent of all the partners for the time being. (a) is wrong: A majority is not enough. (c) is wrong: The partners' consent is what counts. (d) is wrong: The court plays no part in admission.
Question 4 of 5
A firm's partnership deed says the business will continue if a partner dies. One of its three partners dies. What is the effect?
Why (d): Section 42 says that, subject to contract between the partners, a firm is dissolved by events such as a partner's death; here the deed provides for continuation, so the surviving partners carry on. (a) is wrong: Section 42 applies subject to contract, so the deed governs. (b) is wrong: Continuation does not depend on the heirs joining. (c) is wrong: No court order is needed.
Question 5 of 5
Which law provides for the registration of a firm?
Why (a): Chapter VII of the Indian Partnership Act, 1932 provides for the registration of firms. (b) is wrong: The LLP Act governs LLPs, not firms. (c) is wrong: The Companies Act governs companies. (d) is wrong: That Act governs societies.
0 of 5 answered.
Traps in this unit
Treating the firm as a legal person.
Taking 100 as the partner limit.
Sharing profits in the capital ratio without an agreement.
Practise all 240 questions on Unit 27. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the BRBL Online Mock Centre unlocks all 5,800+ BRBL questions, the full-length papers with caselets and key-ins, module mocks and Smart Revision for 18 months (₹1,499).
Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. CAIIB content follows rules and developments up to IIBF's cut-off of 30 June 2026 (where a rule changed later, the update box says so); verify from official sources before relying on them in practice.