Question

Following are the essential elements of a partnership firm except.

• A. At least two persons
• B. There is an agreement between all partners
• C. Equal share of profits and losses
• D. Partnership agreement for some business

Answer 1

The correct option is C Equal share of profits and losses

Partnership firm can be called a partnership between person only when there are at least two person. A single person runnig a business would not be a partnership. An agreement must be there between partners to prevent future riots.

Moreover, the partnership must be for business purpose. A group formed to make city green would not be a partnership firm.

Equal profit and loss ratio is not must for any partnership firm, it is mutual decision of partners to decide the ratio.