CMA Intermediate · Business Laws and Ethics · Indian Partnership Act, 1932
Anita and Bhavna agree to run a boutique in Pune as partners but their agreement says nothing about how long the partnership will last or how it will be ended. What is the legal position?
The partnership is a partnership at will. Under Section 7, when the contract between partners makes no provision for the duration of the partnership or for its determination, it is a partnership at will, and it is not void.
- AThe partnership is void because no duration is stated
- BThe partnership is a partnership at willCorrect
- CThe partnership continues for a fixed term of one year
- DThe partnership cannot be formed until the firm is registered
Explanation
Section 7 says that where the contract between partners makes no provision for the duration of the partnership or for its determination, it is a partnership at will. Absence of duration does not make it void, and no statutory one-year term exists.
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