Under the Indian Partnership Act, 1932, what gives rise to the legal relation of partnership?
Partnership arises from contract under section 5. The relation defined by section 4 rests on agreement to share business profits, with the business carried on by all or any…
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Under the Indian Partnership Act, 1932, what gives rise to the legal relation of partnership?
Answer and explanation
Correct answer B
Partnership arises from contract under section 5. The relation defined by section 4 rests on agreement to share business profits, with the business carried on by all or any acting for all.
Section 5 distinguishes partnership from a Hindu undivided family carrying on family business as such.
Option feedback
Option A
Section 5 expressly excludes status as the source of partnership.
Option B
Partnership arises from contract under section 5.
Option C
Members of a Hindu undivided family carrying on family business as such do not become partners merely on that basis.
Option D
Joint ownership alone does not establish the agreement and business relationship required by section 4.
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