Under Section 4 of the Indian Partnership Act, 1932, 'Partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Which of the following is an essential element? 

Section 4 defines 'Partnership' as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The essential elements are: (i) an agreement (which may be express or implied, written or oral); (ii) to carry on a business; (iii) sharing of profits; and (iv) the business must be carried on by all or any of them acting for all (mutual agency). Registration is not mandatory for the existence of a partnership (though non-registration carries disabilities under Section 69). Sharing of losses is not an essential element-if the agreement is silent on losses, they are shared in the profit-sharing ratio (Section 13(b)). There is no requirement of fixed term or equal capital contribution. The test is the existence of mutual agency and profit-sharing.