Which among the following is NOT true?

The correct answer is Option (3) → Mere co-ownership of a property can amount to partnership.

A partnership needs an agreement to carry on a business and share its profits. Merely owning a property together is not a business, so co-owners are not partners; they become partners only if they carry on a business with the property (buying and selling land for profit, for example).

Option (1) Valid partnership can be formulated even without a written agreement between the partners. — A true statement. The agreement may be oral or written; the Act does not require writing.

Option (2) Each partner carrying on the business is the principal as well as the agent for all the other partners. — A true statement. This is mutual agency.

Option (4) Persons who have entered into partnership with one another are individually called ‘partners’ and collectively called ‘firm’. — A true statement. These are the names given by Section 4 of the Act.