Which among the following is NOT true?

The correct answer is Option (3) → The agreement may carry or not on any business. Mere co-ownership of a property can amount to partnership

A partnership needs an agreement to carry on a business and share its profits. Owning a property jointly is not a business, so co-ownership alone does not make the owners partners. Option (3) says the opposite, so it is the statement that is not true.

Option (1) Valid partnership can be formulated even without a written agreement between the partners — A true statement. An oral agreement is equally valid; writing only helps avoid disputes.

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: each partner binds the others and is bound by them.

Option (4) Persons who have entered into partnership with one another are individually called 'partners' and collectively called 'firm' — A true statement. This is how the Partnership Act names them.