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

Which of the following correctly completes the definition in Section 4 of the Indian Partnership Act, 1932? Partnership is the relation between persons who have agreed to share the profits of a business carried on by:

The business must be carried on by all or any of them acting for all. This is the wording of Section 4 of the Indian Partnership Act, 1932, and it embodies the mutual agency element, so any partner may act for the others in the firm's business.

  1. Aall or any of them acting for allCorrect
  2. Ball of them acting jointly only
  3. Cany one of them acting for himself
  4. Da manager appointed by the majority of them

Explanation

Section 4 defines partnership as 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. The element of mutual agency is therefore captured by the words 'acting for all'. Carrying on by all jointly only is too narrow and is not what the definition says.

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