Section 4 of the Indian Partnership Act 1932 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 correct answer is option 4- ‘relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all’.

When two or more persons join hands to set up a business and share its profits and losses, they are said to be in partnership. Section 4 of the Indian Partnership Act 1932 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’. Persons who have entered into partnership with one another are individually called ‘partners’ and collectively called ‘firm’. The name under which the business is carried is called the ‘firm’s name’. A partnership firm has no separate legal entity, apart from the partners constituting it.