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CSEET · Business Laws and Management · Elements of Law relating to Partnership and Limited Liability Partnership

Ravi, Sunil and Meena agree to share the profits of a trading business. Only Ravi manages the shop daily, and he does so on behalf of all three, who each receive a share of the profits. Which conclusion is correct under the definition in Section 4?

A partnership exists. Section 4 covers persons who agreed to share profits of a business carried on by all or any of them acting for all, so Ravi managing the shop for all three satisfies the definition without others participating daily.

  1. ANo partnership exists because Sunil and Meena do not carry on the business
  2. BA partnership exists only between Ravi and the firm's customers
  3. CA partnership exists because the business is carried on by one of them acting for allCorrect
  4. DA partnership exists only if all three manage the shop daily

Explanation

The definition covers a business carried on by all or any of them acting for all. Ravi acts for all three, and they have agreed to share profits, so the elements of agreement, profit sharing and mutual agency are met.

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