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CS Professional · CSR and Social Governance · Partnership Firms

Anita and Bharat, a married couple in Pune, jointly run a bakery. They have no agreement, written or oral, to share profits as partners and have never held themselves out as a firm. Anita argues that marriage alone makes them partners. What is the legal position?

Marriage alone does not make them partners. Partnership arises from contract and not from status, so there must be an agreement to share the profits of a business carried on by all or any of them acting for all. Without it, no firm exists.

  1. AThey are partners because marriage is a status that creates partnership
  2. BThey are partners because both work in the same business
  3. CThey are partners at will because no duration is fixed
  4. DMarriage alone does not make them partners, as the relation must arise from a contract to share profitsCorrect

Explanation

Section 5 states that partnership arises from contract and not from status. Marriage is a status, and without an agreement to share profits as defined in Section 4 no partnership exists. Partnership at will under Section 7 presupposes an existing partnership, so it does not apply.

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