There are two statements Assertion (A) and Reason (R):
Assertion (A): Partnership Agreement becomes the basis of relationship among the partners.
Reason (R): Partnership is the result of an agreement between two or more persons to do business and share its profits and losses.
Choose the correct option from the following:
There are two statements Assertion (A) and Reason (R):
Assertion (A): Partnership Agreement becomes the basis of relationship among the partners.
Reason (R): Partnership is the result of an agreement between two or more persons to do business and share its profits and losses.
Choose the correct option from the following:
Show Hint
- Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
- Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
- Assertion (A) is correct, but Reason (R) is incorrect.
- Assertion (A) is incorrect, but Reason (R) is correct.
The Correct Option is A
Solution and Explanation
The partnership agreement (deed) lays down the rights, duties and profit sharing of the partners. Their relationship is governed by it. So A is correct.
Step 2: Check the Reason (R):
Section 4 of the Partnership Act defines partnership as the relation between persons who have agreed to share the profits of a business. It is an outcome of an agreement. So R is correct.
Step 3: Does R explain A:
Because partnership arises from an agreement, that agreement becomes the base of the relation among partners. R gives the cause for A. So R is the correct explanation of A.
Step 4: Why the other options are wrong:
(B) says R does not explain A, but it does.
(C) says R is incorrect, but R is correct.
(D) says A is incorrect, but A is correct.
Final Answer:
Both A and R are correct and R explains A. This is option (A).
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