Select the essential features of partnership from the following:(A) P…

Select the essential features of partnership from the following:

(A) Partnership is the result of an agreement between partners.

(B) Co-ownership of a property between people amounts to partnership.

(D) Each partner carrying on the business is the principal as well as the agent for all the other partners.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A), (C) and (D) only

A partnership exists only where persons agree to carry on a business, share its profits, and run it as agents for one another. Owning something together is not enough.

(A) Partnership is the result of an agreement between partners. Correct. A partnership is created by agreement, oral or written; it does not arise from status, as a Hindu Undivided Family does.

(B) Co-ownership of a property between people amounts to partnership. Incorrect. Joint owners of a property are not partners unless they agree to carry on a business with it and share its profits.

(C) Sharing of profits and losses of a business. Correct. The agreement must be to share the profits and losses of the business; persons joining for a charitable purpose are not partners.

(D) Each partner carrying on the business is the principal as well as the agent for all the other partners. Correct. This is mutual agency: each partner binds the others by his acts in the business and is bound by theirs.

NCERT (2026-27 edition):
Nature of Partnership – “… 2. Agreement: 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. 3. Business: The agreement should be to carry on some business. Mere co-ownership of a property does not amount to partnership. For example, if Rohit and Sachin jointly purchase a plot of land, they become the joint owners of the property and not the partners. But if they are in the business of purchase and sale of land for the purpose of making profit, they will be called partners. 4. Mutual Agency: The business of a partnership concern may be carried on by all the partners or any of them acting for all.”