Multiple choice

The cardinal principle of partnership law implies that

  1. the business must be carried on by all the partners or by anyone or more of the partners acting for all

  2. the business may be carried on by all the partners acting for all

  3. the business may be carried on by anyone or more of the partners acting for all

  4. the business must be carried on in accordance with the decided profit (loss) sharing ratio
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The cardinal principle of partnership is mutual agency - every partner is both a principal and an agent for the firm. This means the business must be carried on by ALL partners OR ANY ONE partner acting for ALL (which is exactly what option A states). This fundamental principle distinguishes partnership from other business associations.

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