Under section 6 of the Indian Partnership Act, 1932, receipt of the specified profit-linked payment…
Section 6, Explanation 2, lists all four categories. Receipt of profit-linked payment does not of itself make the recipient a partner. The real relationship still matters;…
Choose your answer
Under section 6 of the Indian Partnership Act, 1932, receipt of the specified profit-linked payment does not of itself make which recipients partners? I. A lender to the business. II. A servant or agent receiving remuneration. III. A deceased partner’s widow or child receiving an annuity. IV. A former owner receiving consideration for goodwill.
Answer and explanation
Correct answer D
Section 6, Explanation 2, lists all four categories. Receipt of profit-linked payment does not of itself make the recipient a partner. The real relationship still matters; this is not an absolute bar on such a person becoming a partner by a separate agreement.
Option feedback
Option A
This omits the former goodwill owner, whose receipt is also covered.
Option B
This omits the deceased partner’s widow or child receiving an annuity, also covered.
Option C
This omits the lender, also covered.
Option D
All four categories are covered; receipt of the payment alone does not establish partnership.
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