Commercial Applications
Statement I: Partnership is an association of two or more persons.
Statement II: Partnership is an agreement between two or more persons.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong
Answer
Both I and II are correct
Reason — Both statements are correct. Statement I is correct because partnership is an association of two or more persons (there must be at least two persons to form a partnership). Statement II is also correct because partnership is the outcome of an agreement between two or more persons — the relation of partnership arises from the formation of a contract, not from status or birth.
Related Questions
Why is it recommended to have a written partnership deed?
- It is mandatory for registration under the Companies Act.
- It serves as a legal record to resolve disputes.
- It reduces the firm's tax liability.
- It ensures limited liability for all partners.
A partnership firm is not registered. The firm lent ₹50,000 to a customer, but the customer failed to repay it. Can the firm take legal action against the customer?
- Yes, as registration is optional
- No, because the firm is not registered
- Yes, if the partners agree unanimously
- No, unless the firm gets registered before filing the case
Which of the following is NOT a demerit of partnership?
- Unlimited liability
- Limited Resources
- Secrecy
- Lack of public confidence
Meera, a partner in a firm, withdraws her share of capital without informing the other partners, resulting in financial strain on the firm. Which feature of partnership prevents such actions?
- Mutual consent among partners
- Written agreement
- Sharing of profits and losses
- Unlimited liability