Match List I with List II in context of partnership firm.

Choose the correct answer from the options given below.

A-II, B-I, C-IV, D-III

The correct answer is option 2- A-II, B-I, C-IV, D-III.

* In a partnership, each individual partner can be both an agent and a principal.

The business of a partnership concern may be carried on by all the partners or any of them acting for all. This statement has two important implications. First, every partner is entitled to participate in the conduct of the affairs of its business. Second, that there exists a relationship of mutual agency between all the partners. Each partner carrying on the business is the principal as well as the agent for all the other partners. He can bind other partners by his acts and also is bound by the acts of other partners with regard to business of the firm. Relationship of mutual agency is so important that one can say that there would be no partnership, if the element of mutual agency is absent.
As an agent, he represent other partners and binds other partner through his acts.
As a principal, he is bound by the act of other partners.

* Partnership agreement

A partnership is established through an agreement between two or more individuals to conduct business together and distribute its profits and losses among them. This agreement forms the foundation of the partnership's relationship. While a written agreement is not mandatory, it is highly recommended to prevent potential disputes. An oral agreement is also considered legally valid, but having a written agreement provides clarity and minimizes misunderstandings between partners and this written agreement is called a partnership deed.