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

Under the Indian Partnership Act, 1932, partnership is described as the relation between persons who have agreed to:

Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Equal capital and sharing of losses are not part of the statutory definition.

  1. AShare the profits of a business carried on by all or any of them acting for allCorrect
  2. BContribute equal capital to a business carried on by a manager
  3. CShare the losses of a business carried on by any outsider
  4. DCarry on any activity jointly, whether or not it is a business

Explanation

The definition in Section 4 says partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Equal capital is not required, and the agreement must concern profit sharing in a business, not merely any joint activity.

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