Ajay and Abhi decided to run a clinic in slum area providing free medical advice and also distribute medicine free of cost. Both of them decided to contribute ₹ 100000 each as initial corpus. Should they enter into partnership agreement? If yes, what will be the reason?
Answer & explanation
Correct answer: option 2
No, they should not have any partnership deed because the activity they are carrying is charitable in nature. If they agreed to do business and share profits, then they must enter into agreement.