Which of the following is not the feature of partnership?

Partnership is the result of an agreement between two or more persons to do business and share its profits only

The correct answer is option 2- Partnership is the result of an agreement between two or more persons to do business and share its profits only.

'Partnership is the result of an agreement between two or more persons to do business and share its profits only' is not the feature of partnership as losses are shared also.

Partnership is the result of an agreement between two or more persons to do business and share its profits and losses. The agreement becomes the basis of relationship between the partners. It is not necessary that such agreement is in written form. An oral agreement is equally valid. But in order to avoid disputes, it is preferred that the partners have a written agreement. The agreement between partners must be to share profits and losses of a business. Though the definition contained in the Partnership Act describes partnership as relation between people who agree to share the profits of a business, the sharing of loss is implied. Thus, sharing of profits and  losses is important. 

OTHER OPTIONS

• There should be at least two persons coming together for a common goal- It is feature of partnership. In order to form partnership, there should be at least two persons coming together for a common goal. In other words, the minimum number of partners in a firm can be two. There is however, a limit on their maximum number. By virtue of Section 464 of the Companies Act 2013, the Central Government is empowered to prescribe maximum number of partners in a firm but the number of partners can not be more than 100. The Central government has prescribed the maximum number of partners in a firm to be 50.

• The business of a partnership concern may be carried on by all the partners or any of them acting for all- It is mutual agency feature of partnership. 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.

•  The business profits and losses are shared by all the partners as per profit sharing ratio- It is a feature of partnership as profits are shared in the profit sharing ratio. If profit sharing ratio is not given then it is shared equally.