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Saturday, April 13

Partnership is created by contract entered between the partners, not by status


Partnership can be created only by way of an agreement between the partners. There has to be an agreement between the partners to carry on a business and to share profits of the business. 

Partnership is not created by status. Thus the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business.



See section 5 of the Indian Partnership Act, 1932 on www.lawzonline.com