Question

There are two statements Assertion (A) and Reason (R):
Assertion (A): Partnership is the result of an agreement between two or more persons to do business and share its profits and losses.
Reason (R): Partnership agreement should always be in written form.
Choose the correct alternative from the following:

• A. Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are correct, but Reason (R) is \textit{not} 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:

Partnership can be formed through an oral or written agreement. A written agreement is advisable but not mandatory under law.

Answer 1

The Correct Option is C

Assertion (A) is correct: A partnership arises from an agreement between two or more persons to carry on a business and share its profits and losses. This is as per Section 4 of the Indian Partnership Act, 1932.
Reason (R) is incorrect: The agreement between partners can be oral or written. There is no legal requirement that a partnership agreement must always be in written form.
Hence, the correct combination is that Assertion (A) is correct and Reason (R) is incorrect.