Which statements are true about partnership?

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

(B) Valid partnership can be formulated even without a written agreement between the partners.

(C) Interest on partner's loan is to be given @ 12% p.a., if the deed is silent about the rate

(D) The maximum number of partners can be 50.

Choose the correct answer from the options given below:

(A), (B) and (D) only

The correct answer is option 1- (A), (B) and (D) only.

(A) Each partner carrying on the business is the principal as well as the agent for all the other partners. IT IS TRUE. 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.

(B) Valid partnership can be formulated even without a written agreement between the partners.  IT IS TRUE. 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

(C) Interest on partner's loan is to be given @ 12% p.a., if the deed is silent about the rate.  IT IS NOT TRUE as it is 6% p.a. not 12% p.a. If a partner has provided a loan to the partnership for business purposes, they are entitled to receive interest on the loan amount at a rate of 6 percent per annum in the absence of any agreement.

(D) The maximum number of partners can be 50.  IT IS TRUE. 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.