Question

Which of the following does not reflect the mutual agency principle in partnership?

• A. The partner is both agent & principle
• B. A partner can, by his act bind other partner and in turn is bound by the acts of other partners
• C. All partners should actively participate in the business
• D. Business may be managed by one or more partners

Answer 1

Answer: (C)

All partners should actively participate in the business

Mutual agency relationship which refers to the mutual relationship and understanding between the partners of a business where every partner acts as an agent as well as a boss for the other partner. So it is not necessary for all the partners to participate in the business. Even an act by one partner is bound on all other partner.