📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    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. Does it mean that losses are not shared: 
    A A minor may be admitted in partnership, only for the profits, but he cannot share in losses. Correct Answer Incorrect Answer
    B It also depends on the partnership agreement. A person may share the profits but may not share in losses. Correct Answer Incorrect Answer
    C Sharing of profits also include losses (negative profits) Correct Answer Incorrect Answer
    D Only (a) and (c) Correct Answer Incorrect Answer
    E All of the above. Correct Answer Incorrect Answer

    Solution

    Under the Indian Partnership Act, 1932, a minor can be admitted to share profits but not losses (section 30). It depends on the partnership agreement whether a person shares profits and/or losses. Sharing of profits generally implies sharing losses as well, but the agreement may vary to exclude losses for some partners. Hence, all the statements are correct.

    Practice Next
    More Partnership Laws Questions
    ask-question