A and B entered into an agreement to carry on a business of manufacturing and selling toys. Each one of them contributed Rs. $35$ lakhs as their capital with a condition that A and B will share the profits equally, but the loss, if any is to be borne by A alone. Referring to the provisions of the Indian Partnership Act, $1932$ decide whether there exists a partnership between A and B.
There is no partnership between A and B
A is sub-partner of B
There is partnership by holding out
There is partnership between A and B. A is partner in profit only

Question

A and B entered into an agreement to carry on a business of manufacturing and selling toys. Each one of them contributed Rs. $35$ lakhs as their capital with a condition that A and B will share the profits equally, but the loss, if any is to be borne by A alone. Referring to the provisions of the Indian Partnership Act, $1932$ decide whether there exists a partnership between A and B.
There is no partnership between A and B
A is sub-partner of B
There is partnership by holding out
There is partnership between A and B. A is partner in profit only

Toppr Admin · Accepted Answer

A partnership-basically refers to the contract between two or more people who have agreed to-carry on certain business in order to achieve common goals- A partner that only shares profit is regarded as a partner in profit and therefore A is a normal partner and B is a partner in profit only-xA0-

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. A partner that only shares profit is regarded as a partner in profit and therefore A is a normal partner and B is a partner in profit only.