Question:
‘The business of partnership firm can be carried on by all the partners or any one of them acting for all.’ This statement indicates which of the following characteristic of partnership?
‘The business of partnership firm can be carried on by all the partners or any one of them acting for all.’ This statement indicates which of the following characteristic of partnership?
Updated On: Jul 4, 2025
- Agreement
- Implied authority
- Mutual agency
- Utmost good faith
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The Correct Option is C
Solution and Explanation
The statement refers to the principle that every partner in a firm can represent the firm and other partners. This is known as mutual agency, which is a fundamental characteristic of partnership under the Indian Partnership Act.
Mutual Agency: Means each partner is both an agent and a principal of the firm. Any partner can bind the firm through their actions taken in the normal course of business.
Agreement: Refers to the formation of partnership, not how the business is conducted.
Implied Authority: Allows a partner to act on behalf of the firm within certain limits but does not cover the "acting for all" principle.
Utmost Good Faith: Refers to honesty and full disclosure, not agency. Hence, the most appropriate answer is (C) Mutual agency.
Mutual Agency: Means each partner is both an agent and a principal of the firm. Any partner can bind the firm through their actions taken in the normal course of business.
Agreement: Refers to the formation of partnership, not how the business is conducted.
Implied Authority: Allows a partner to act on behalf of the firm within certain limits but does not cover the "acting for all" principle.
Utmost Good Faith: Refers to honesty and full disclosure, not agency. Hence, the most appropriate answer is (C) Mutual agency.
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