Identify the feature of partnership that says a partner can bind other partners by his acts and also is bound by the acts of other partners with regard to business of the firm.

Mutual agency

The correct answer is Option 2 - Mutual agency

The operation of a partnership involves the active involvement of all partners or any individual partner acting on behalf of the entire partnership. This concept of "Mutual Agency" has two significant implications. Firstly, every partner has the right to participate in the management and decision-making of the partnership's affairs. Secondly, it establishes a relationship of mutual agency among all partners. This means that each partner, while conducting the partnership's business, acts both as a principal and an agent for all the other partners. As an agent, a partner can legally bind the other partners through their actions, and likewise, they are bound by the actions of other partners concerning the business of the partnership. The idea of mutual agency is so fundamental that without it, a partnership cannot exist. The essence of a partnership lies in this interdependent relationship, where partners collectively contribute to the business and share the responsibility for its actions and outcomes.