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

Statement I: A partnership requires an agreement to share the profits of a business. Statement II: The business must be carried on by all the partners personally and cannot be carried on by any one of them acting for all. Which is correct?

Only Statement I is correct. Partnership needs an agreement to share profits of a business, but the business may be carried on by all or any of them acting for all, so it need not be carried on by every partner personally.

  1. ABoth statements are correct
  2. BOnly Statement I is correctCorrect
  3. COnly Statement II is correct
  4. DNeither statement is correct

Explanation

Section 4 requires an agreement to share profits of a business. The business may be carried on by all or any of them acting for all, so Statement II is wrong because it denies that one partner can act for all.

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