Question

Assertion (A): Each partner is a principal as well as an agent for all the other partners.

Reason (R): As per the definition of the Partnership Act, partnership business may be carried on by all the partners or any of them acting for all.

Choose the correct alternative from the following:

Options

• Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is correct, but Reason (R) is incorrect.

• Assertion (A) is incorrect, but Reason (R) is correct.

Answer 1

Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

Explanation:

In a partnership, each partner is both a principal and an agent: a principal because they are bound by the acts of other partners and an agent because they can bind other partners by their acts. This is exactly explained by the definition in the Indian Partnership Act, 1932, which states that the business may be carried on by all partners or any one of them acting for all. Hence, both the assertion and the reason are correct, and the reason properly explains the assertion.