Multiple choice

The most important element in partnership is

  1. business

  2. sharing of profits

  3. agreement

  4. business to be carried on by all or any of them acting for all

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The essence of partnership is mutual agency - each partner is both a principal and an agent for the other partners and the firm. This means partners act on behalf of each other and their actions bind the firm. Sharing profits, having an agreement, or carrying on business are necessary but not sufficient - the agency relationship is what truly defines partnership.