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Adjustment in Partner's Capital A/c

X admits Y as...

Question

X admits Y as a partner. Y does not bring any capital. He is not liable for any loss and is to receive Rs. 1,000 pm. as salary in lieu of profits and have all the powers of a partner. Can Y be regarded as a partner?

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Solution

Solution: Section to which the given problem relates: Sections 4 and 6.
Decision: Yes.
Reason: All the essential elements of partnership. are present. Bringing of capital and sharing o losses are not essential elements to constitute a partnership.

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