Question

According to Section 4 of the Indian Partnership Act, 1932, partnership is the relation between persons who have agreed to share the profits of a business carried on by:

• A. All partners individually
• B. Any government authority
• C. All or any of them acting for all
• D. Only the active partners

Hint:

The essential feature of partnership is: \[ \mathrm{Mutual\ Agency} \] meaning: \[ \mathrm{Each\ partner\ can\ act\ on\ behalf\ of\ all\ partners} \]

Answer 1

The Correct Option is C

Concept: Section 4 of the Indian Partnership Act, 1932 defines partnership as: \[ \textit{“Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”} \] This definition highlights the principle of mutual agency in partnership.

Step 1: Understand the meaning of partnership.
In a partnership firm:
• Partners agree to share profits and losses.
• Business may be conducted by all partners or by any one partner on behalf of all. Thus: \[ \boxed{\mathrm{All\ or\ any\ of\ them\ acting\ for\ all}} \]

Step 2: Analyze the remaining options.
All partners individually Business is not necessarily carried on individually by every partner. \[ \Rightarrow \mathrm{Incorrect} \] Any government authority A government authority is not related to partnership definition. \[ \Rightarrow \mathrm{Incorrect} \] Only the active partners Even one partner may act on behalf of all partners. \[ \Rightarrow \mathrm{Incorrect} \]

Step 3: Identify the correct option.
The correct phrase under Section 4 is: \[ \boxed{\mathrm{All\ or\ any\ of\ them\ acting\ for\ all}} \] Hence, the correct answer is: \[ \boxed{\mathrm{(C)}} \]