Step 1: Understanding the Concept:
To determine what is "not" an essential feature, we must verify the "must-have" characteristics of a partnership as defined by the Indian Partnership Act, 1932.
These essential features include:
1. Association of two or more persons.
2. Existence of an agreement.
3. Lawful business.
4. Sharing of profits.
5. Mutual Agency.
Step 2: Detailed Explanation:
Let's evaluate each option against the legal requirements:
Option (A): At least two persons. This is essential. A person cannot partner with themselves. There must be a minimum of two individuals to form a partnership.
Option (B): Existence of an agreement. This is essential. Partnership is a contractual relationship. Without a voluntary agreement to work together, no partnership exists.
Option (D): Agreement is for a business. This is essential. The purpose must be to carry out a commercial activity (trade, occupation, or profession) for gain. Joint ownership of property (like two brothers owning a house) without a business motive is not a partnership.
Option (C): Profits and losses are shared equally. This is not an essential feature.
While the "sharing of profits" is mandatory, the "ratio" of sharing is entirely up to the partners.
Partners can decide to share profits in any ratio they agree upon (e.g., 3:2, 4:1, or 70%:30%).
Furthermore, while profit sharing is essential, the sharing of losses is not strictly mandatory for all partners.
A partner may be admitted to the "benefits of partnership" only (like a minor) where they share profits but not losses.
The rule of "equal sharing" only applies as a default provision under Section 13 of the Act when the partners have not agreed on a specific ratio.
Therefore, equal sharing is a secondary rule of convenience, not an inherent essential requirement for the legal existence of a partnership.
Step 3: Final Answer:
Since equal profit sharing is optional and dependent on the agreement, it is not an essential feature.
The correct answer is (C).