Multiple choice

One of the essential elements of a partnership is agreement

  1. which is enforceable

  2. which is legal

  3. between two or more persons

  4. the object of which is not prohibited by law
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the Indian Partnership Act, 1932, a partnership is defined as a 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 essential elements are: (1) an agreement, (2) between two or more persons, (3) to share profits of a business, and (4) carrying on of business. Option C correctly identifies that partnership requires an agreement between two or more persons. Options A, B, and D describe characteristics that agreements must have but are not the core definitional element of partnership itself.

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