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      Question

      Under the Partnership Act, 1932, the essential element

      of partnership is:
      A The joint ownership of a property used for commercial purposes Correct Answer Incorrect Answer
      B An agreement between persons to share profits of a business carried on by all or any of them acting for all Correct Answer Incorrect Answer
      C The holding of common property with the intent to eventually sell it for profit Correct Answer Incorrect Answer
      D The collective management of assets by members of a Hindu Undivided Family Correct Answer Incorrect Answer
      E The acquisition of a distinct legal entity status separate from its members Correct Answer Incorrect Answer

      Solution

      Section 4 of the Partnership Act, 1932, defines partnership as the relation between persons who have agreed to share profits of a business carried on by all of them or any of them acting for all. This requires: (1) Agreement, (2) Sharing of profits, (3) Business carried on by all or any for all (mutual agency).

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