Question

Which of the following is not an essential feature of partnership?

• A. It has at least two persons.
• B. An agreement exists between/among all the partners.
• C. Profits and losses are shared equally.
• D. Agreement is for a business.

Hint:

In partnership: \[ \mathrm{Profit\ sharing\ ratio} \] may be: \[ \mathrm{Equal\ or\ Unequal} \] depending upon agreement among partners.

Answer 1

The Correct Option is C

Concept: The essential features of partnership under the Indian Partnership Act, 1932 include:
• Minimum two persons
• Agreement between partners
• Business activity
• Sharing of profits
• Mutual agency However, profits and losses need not be shared equally. Partners may agree on any ratio.

Step 1: Identify essential features of partnership.
A valid partnership requires: \[ \mathrm{Two\ or\ more\ persons} \] \[ \mathrm{Agreement\ among\ partners} \] \[ \mathrm{Business\ activity} \] and \[ \mathrm{Sharing\ of\ profits} \]

Step 2: Analyze option (C).
Partnership law does not require equal sharing of profits and losses. Partners may share profits in: \[ \mathrm{Any\ mutually\ agreed\ ratio} \] Thus: \[ \boxed{\mathrm{Profits\ and\ losses\ are\ shared\ equally}} \] is not an essential feature.

Step 3: Analyze remaining options.
At least two persons Essential requirement of partnership. \[ \Rightarrow \mathrm{Essential\ feature} \] Agreement between partners Partnership arises from agreement. \[ \Rightarrow \mathrm{Essential\ feature} \] Agreement for business Partnership must involve business activity. \[ \Rightarrow \mathrm{Essential\ feature} \]

Step 4: Identify the correct option.
Therefore, the statement which is not an essential feature is: \[ \boxed{\mathrm{Profits\ and\ losses\ are\ shared\ equally}} \] Hence, the correct answer is: \[ \boxed{\mathrm{(C)}} \]