Question

Assertion (A): Each partner is a principal as well as an agent for all the other partners. Reason (R): As per the definition of the Partnership Act, partnership business may be carried on by all the partners or any of them acting for all. Choose the correct option from the following:

• A. Both Assertion (A) and Reason (R) are correct, but Reason (R) is {not} the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
• C. Assertion (A) is correct, but Reason (R) is incorrect.
• D. Assertion (A) is incorrect, but Reason (R) is correct.

Hint:

In partnerships, every partner has a dual role as both principal and agent, as defined under the Partnership Act.

Answer 1

The Correct Option is B

According to the Partnership Act, each partner acts as a principal when representing their own interests and as an agent when representing the interests of other partners. The definition in the Partnership Act clarifies that the business can be conducted by all partners collectively or by any one partner acting on behalf of all. This directly explains Assertion (A), as every partner has a dual role in the partnership business. Hence, both the Assertion (A) and the Reason (R) are correct, and Reason (R) appropriately explains Assertion (A).