Question

In which of the following cases there is NOT partnership ?uy
(I) A & B buy 100 bales of cotton agreeing to divide these between them.
(II) (I) A & B buy 100 bales of cotton,which they agree to sell for their joint account and to share the profit or loss.
(III) A & B are joint owner of a house. They rent it out to C and divide the net rent equally.
(IV) A is a publisher. He agrees to publish at his own expense a book written by B, and to pay Y half the net profits.

• A. (I)
• B. (III) & (IV)
• C. (II), (III) & (IV)
• D. (I), (II) & (IV)

Answer 1

The correct option is D (I), (II) & (IV)

Partnership will only be when there are two or more partners and they carry on a business.

In the first option A & B bought bales of cotton and divided amongst themselves. It is not a partnership because there is no business between A & B, they are buying for self consumption.

In the second option A & B bought bales of cotton and sold it for their joint accout. Again it is not a partnership because they both are selling the bales to therir joint account which is not a business.

In the fourth option A publishes book of B and pays off Y. It is not partnership because A & B are not partners and A alone runs his publishing company.

The third option is a partnership because A & B together run a joint and they rent out a land to other party C and shared the profits which is a business.