Question

What is meant by ‘Partnership’?

Hint:

Recall Section 4 of the Indian Partnership Act, 1932.

Answer 1

Step 1: State the statutory definition:
Section 4 of the Indian Partnership Act, 1932 defines partnership as “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.”

Step 2: Draw out the key elements:
This requires an agreement between two or more persons, a lawful business, an intention to share profits, and mutual agency — each partner is both a principal and an agent of the others.

Final Answer:
Partnership is the relation between persons who agree to share the profits of a business carried on by all, or by any of them acting for all.