Question

Select the essential features of partnership from the following:
(A) Partnership is the result of an agreement between partners.
(B) Co-ownership of a property between people amounts to partnership.
(C) Sharing of profits and losses of a business.
(D) Each partner carrying on the business is the principal as well as the agent for all the other partners.
Choose the correct answer from the options given below:

• A. (A), (B) and (C) only
• B. (A), (B) and (D) only
• C. (A), (B), (C) and (D)
• D. (A), (C) and (D) only

Hint:

Joint ownership of property alone does not create a partnership. Agreement, profit sharing and mutual agency do.

Answer 1

The Correct Option is D

Step 1: Elimination approach:
The four options differ mainly in whether (B) is included. Options 1, 2 and 3 contain (B). Option 4 does not. So the question depends on one point: does co-ownership of property make a partnership?

Step 2: Decide (B):
It does not. Two brothers may inherit a house together. They own it jointly but do not run a business to earn a profit, and there is no agreement to share profit. The law says this plainly.

Step 3: Confirm the rest:
Agreement, profit sharing and mutual agency are the three pillars of the definition. So (A), (C) and (D) all stay in.

Final Answer:
Drop (B), keep A, C and D. \[ \boxed{\text{Option 4}} \]