Under the Indian Partnership Act, 1932, who is a partner on the facts stated?
Question and options
Under the Indian Partnership Act, 1932, who is a partner on the facts stated?
A lender whose only interest in the business is repayment linked to its profits.
A person who agrees to share profits in a business carried on by all the participants or by any of them acting for all.
A joint owner whose only involvement is sharing returns from jointly held property.
A former owner whose only interest is a profit share received as consideration for selling goodwill.
Answer and explanation
Section 4 requires an agreement to share the profits of a business carried on by all the participants or by any of them acting for all. The latter requirement is mutual agency. Under section 6, the parties' real relationship governs.
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