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The essential elements of Partnership does not include:
- a)There must be an association of two or more persons.
- b)There must be an agreement to share profits and losses equally.
- c)There must be mutual agency among partners.
- d)The relationship must be registered.
Correct answer is option 'B,D'. Can you explain this answer?
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The essential elements of Partnership does not include:a)There must be...
Partnership Essential Elements:
A: There must be an association of two or more persons.
- Partnership requires the involvement of at least two or more individuals who join together to carry out a business venture.
B: There must be an agreement to share profits and losses equally.
- Partnerships are based on the principle of sharing both profits and losses in a predetermined ratio agreed upon by the partners.
C: There must be mutual agency among partners.
- Mutual agency means that each partner has the authority to act on behalf of the partnership and bind it legally. This allows partners to make decisions and enter into contracts on behalf of the partnership.
D: The relationship must be registered.
- Unlike a company, a partnership does not require registration with any government authority. However, partners may choose to register their partnership to enjoy certain legal benefits or to fulfill legal requirements in some jurisdictions.
Explanation:
- The essential elements of a partnership are crucial for its formation and functioning. While elements A, C, and D are essential, element B (equal sharing of profits and losses) and element D (registration) are not necessary for a partnership.
- Profit and loss sharing can be determined based on the agreement among partners, and it is not required to be equal.
- Registration is not a mandatory requirement for a partnership, although partners may opt for registration for various reasons such as tax benefits or legal recognition.
Therefore, the correct answer is B and D.
A: There must be an association of two or more persons.
- Partnership requires the involvement of at least two or more individuals who join together to carry out a business venture.
B: There must be an agreement to share profits and losses equally.
- Partnerships are based on the principle of sharing both profits and losses in a predetermined ratio agreed upon by the partners.
C: There must be mutual agency among partners.
- Mutual agency means that each partner has the authority to act on behalf of the partnership and bind it legally. This allows partners to make decisions and enter into contracts on behalf of the partnership.
D: The relationship must be registered.
- Unlike a company, a partnership does not require registration with any government authority. However, partners may choose to register their partnership to enjoy certain legal benefits or to fulfill legal requirements in some jurisdictions.
Explanation:
- The essential elements of a partnership are crucial for its formation and functioning. While elements A, C, and D are essential, element B (equal sharing of profits and losses) and element D (registration) are not necessary for a partnership.
- Profit and loss sharing can be determined based on the agreement among partners, and it is not required to be equal.
- Registration is not a mandatory requirement for a partnership, although partners may opt for registration for various reasons such as tax benefits or legal recognition.
Therefore, the correct answer is B and D.
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The essential elements of Partnership does not include:a)There must be an association of two or more persons.b)There must be an agreement to share profits and losses equally.c)There must be mutual agency among partners.d)The relationship must be registered.Correct answer is option 'B,D'. Can you explain this answer?
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The essential elements of Partnership does not include:a)There must be an association of two or more persons.b)There must be an agreement to share profits and losses equally.c)There must be mutual agency among partners.d)The relationship must be registered.Correct answer is option 'B,D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The essential elements of Partnership does not include:a)There must be an association of two or more persons.b)There must be an agreement to share profits and losses equally.c)There must be mutual agency among partners.d)The relationship must be registered.Correct answer is option 'B,D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The essential elements of Partnership does not include:a)There must be an association of two or more persons.b)There must be an agreement to share profits and losses equally.c)There must be mutual agency among partners.d)The relationship must be registered.Correct answer is option 'B,D'. Can you explain this answer?.
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