Question

Assertion (A): Each partner is a principal as well as an agent for all the other partners. Reason (R): As per the definition of the Partnership Act, partnership business may be carried on by all the partners or any of them acting for all. Choose the correct option from the following:

• A. Both Assertion (A) and Reason (R) are correct, but Reason (R) is {not} the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
• C. Assertion (A) is correct, but Reason (R) is incorrect.
• D. Assertion (A) is incorrect, but Reason (R) is correct.

Hint:

In partnerships, every partner has a dual role as both principal and agent, as defined under the Partnership Act.

Answer 1

The Correct Option is B

The Partnership Act establishes that each partner functions as a principal for their individual interests and as an agent when acting for other partners. The Act further clarifies that the business may be managed by all partners jointly or by a single partner representing the entire group. This aligns directly with Assertion (A), as each partner holds a dual capacity within the partnership. Consequently, both Assertion (A) and Reason (R) are valid, with Reason (R) providing a suitable explanation for Assertion (A).