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CS Professional · CSR and Social Governance · Partnership Firms

Three trustees of a charitable society's commercial arm, Asha, Bharat and Chitra, start a catering business under a written deed. The deed fixes profit shares but says nothing about how long the partnership will run or how it will end. What kind of partnership is this?

It is a partnership at will. Section 7 says that where the contract between partners makes no provision for the duration of the partnership or for its determination, the partnership is at will. A written deed with profit shares does not alter that.

  1. AParticular partnership, because the deed fixes profit shares
  2. BPartnership at will, because the contract makes no provision for duration or determinationCorrect
  3. CPartnership for a fixed term, because a written deed exists
  4. DVoid partnership, because duration is not stated

Explanation

Under Section 7, where no provision is made by contract for the duration of the partnership or its determination, it is a partnership at will. A written deed and profit shares do not change this. Silence on both duration and determination is the test, so the other options are wrong.

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