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ACCA Applied Skills · Corporate and Business Law (Global) · Partnerships

Amara and Bao agree to run a bakery together with a view to profit and share the profits equally. They have not signed a written agreement and have not registered anything. Which statement is correct?

A partnership can exist without writing or registration. It arises where people carry on a business together with a view to profit, so Amara and Bao are likely partners on these facts, whatever paperwork is missing.

  1. ANo partnership exists because there is no written agreement
  2. BA partnership can exist because the law looks at the relationship, namely carrying on a business in common with a view to profitCorrect
  3. CA partnership exists only once it is registered with the registrar of companies

Explanation

A general partnership arises from the facts: persons carrying on a business in common with a view to profit. No writing or registration is required. Option A is wrong because a partnership agreement can be oral or implied. Option C confuses a general partnership with registered forms such as limited partnerships.

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