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On sale of th...

Question

On sale of the goodwill after dissolution which of the following rights are available to the seller of the goodwill?

A

To advertise his business

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B

To use his firms name

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C

To represent himself as carrying on the business of the firm

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D

To solicit customer from those dealing with the firm

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Solution

The correct option is A To advertise his business
When the goodwill of a firm is sold after dissolution, a partner may carry on a business competing with that of the buyer and seller has the right to advertise his business. But he can not use the firm name and represent himself as carrying on the business of the firm because it may mislead the customer. And also seller can not solicit customer.

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Q. X and Y are partners. They decided to dissolve their firm. After dissolution they sold the goodwill of firm to W. State the legal position of the following acts:
Case (a): Can X or Y carry on a business competing with that of W?
Case (b): Can X or Y advertise: such business?
Case (C): Can X or Y .use the firm name if there. is no agreement l between .them and LIP?
Case (d): an X or Y represent himself as carrying on firms business it there is no agreement between them and W?
Case (e) Can X or Y solicit the business from the customers of dissolved firm if there is no agreement between them and Vi?
Case (f): Can X or Y make an agreement with W that either of them will not carry on any business similar to that of a firm within a specified period or within specified limits?

Q. An agreement between the buyer and seller of goodwill whereby the seller agrees not to carry on business within specified local limits so long as the buyer or his representatives carry on the business is valid provided __________________.

Q. The acts of every partner who does any act for carrying on in the usual way the business of the kind carried on by the firm bind the firm and his partners unless __________.

Q. The following trading results are available in respect of the business carried on by a firm:
2001 Loss Rs.10,000
2002 Loss Rs.5,000
2003 Profit Rs.80,000
2004 Profit Rs.55,000
The value of goodwill on the basis of 5 years' purchase of average profit of the business will be ___________.

Q. In dissolution of partnership, business ________ whereas in dissolution of firm, the business is ________.

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