Question consists of two statements, namely, Assertion (A) and Reason (R). Select the correct answer.
Assertion (A): Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Reason (R): The term Partnership is defined in the Partnership Act, 1932.
Answer & explanation
Correct answer: option 1
Assertion (A) provides a definition of partnership: a business relationship where individuals agree to share the profits of a business carried on by any or all of them, while acting for the collective benefit of all partners.
Reason (R) states that the term "Partnership" is defined in the Partnership Act, 1932. This is also true. The Partnership Act, 1932 (or similar legislation in various jurisdictions) provides the legal framework and definition for partnerships. It outlines the rights, responsibilities, and regulations governing partnerships. But Assertion is not explained by the statement in reason.