Question:medium
‘The business of partnership firm can be carried on by all the partners or any one of them acting for all.’ This statement indicates which of the following characteristic of partnership?
‘The business of partnership firm can be carried on by all the partners or any one of them acting for all.’ This statement indicates which of the following characteristic of partnership?
Updated On: Jan 14, 2026
- Agreement
- Implied authority
- Mutual agency
- Utmost good faith
Show Solution
The Correct Option is C
Solution and Explanation
The statement describes the principle where each partner can act as a representative for the firm and all other partners. This concept is identified as mutual agency, a core attribute of partnerships as defined by the Indian Partnership Act.
Mutual Agency: This signifies that each partner functions as both an agent and a principal for the firm. Consequently, any partner's actions, performed within the ordinary scope of business, can legally bind the entire firm.
Agreement: This term pertains to the establishment of a partnership rather than the operational conduct of the business.
Implied Authority: This grants a partner the power to act for the firm within specified boundaries but does not encompass the broader principle of representing all partners.
Utmost Good Faith: This principle emphasizes honesty and complete disclosure among partners and is unrelated to the concept of agency. Therefore, the most fitting answer is (C) Mutual agency.
Mutual Agency: This signifies that each partner functions as both an agent and a principal for the firm. Consequently, any partner's actions, performed within the ordinary scope of business, can legally bind the entire firm.
Agreement: This term pertains to the establishment of a partnership rather than the operational conduct of the business.
Implied Authority: This grants a partner the power to act for the firm within specified boundaries but does not encompass the broader principle of representing all partners.
Utmost Good Faith: This principle emphasizes honesty and complete disclosure among partners and is unrelated to the concept of agency. Therefore, the most fitting answer is (C) Mutual agency.
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