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Consider the following statements.
1. Atleast three persons are necessary for forming a partnership.
2. The right to share a profit is full proof of one being a partner.
3. The business of the firm can be conducted even by one partner.
Which of the statement(s) given above is/are correct?
1. Atleast three persons are necessary for forming a partnership.
2. The right to share a profit is full proof of one being a partner.
3. The business of the firm can be conducted even by one partner.
Which of the statement(s) given above is/are correct?
Answer & Solution
Answer: Option
B
Solution:
The correct option is "Only 3".
Statement 1: At least two persons are required to form a partnership, not three. So this statement is incorrect.
Statement 2: The right to share profit is not a conclusive proof of being a partner. For example, employees or creditors may also receive a share of profit without being partners. Hence, this statement is also incorrect.
Statement 3: The business of the firm can indeed be conducted by one partner acting on behalf of all other partners. This is correct according to the principle of mutual agency in partnership law.
Therefore, among the given statements, only Statement 3 is correct, which corresponds to Option B.
Statement 1: At least two persons are required to form a partnership, not three. So this statement is incorrect.
Statement 2: The right to share profit is not a conclusive proof of being a partner. For example, employees or creditors may also receive a share of profit without being partners. Hence, this statement is also incorrect.
Statement 3: The business of the firm can indeed be conducted by one partner acting on behalf of all other partners. This is correct according to the principle of mutual agency in partnership law.
Therefore, among the given statements, only Statement 3 is correct, which corresponds to Option B.