Question

In partnership, preparation of partnership agreement is:

• A. Compulsory
• B. Voluntary
• C. Optional
• D. None of these

Hint:

Partnership deed is voluntary, but highly recommended to avoid disputes among partners.

Answer 1

The Correct Option is B

Step 1: Meaning of partnership agreement.
A partnership agreement (also called Partnership Deed) contains terms and conditions agreed upon by partners.
Step 2: Legal requirement.
As per the Indian Partnership Act, 1932, preparation of partnership deed is not compulsory. If partners wish, they may prepare it in writing, otherwise oral agreement is valid.
Step 3: Consequence if not prepared.
If no deed is prepared, provisions of the Partnership Act apply by default (e.g., no salary, equal profit-sharing).
Step 4: Conclude.
Thus, preparation of partnership agreement is voluntary, not compulsory.
Final Answer: \[ \boxed{\text{Voluntary}} \]