State giving reasons whether the following are partnerships as per the provisions under the Indian Partnership Act, 1932. X, Y, and Z agree to…

As per Section 4 of the Indian Partnership Act,1932, "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. (i) Yes: The sharing of profits is an essential feature of partnership. There can be no partnership where only one of the partners is entitled to the whole of the profits of the business. Partners must agree to share the profits in any manner they choose. But an agreement to share losses is not an essential requirement. It is open to one or more partners to agree to share all the losses. (ii) No: Sharing of profit, which is a prima facie evidence, exists but mutual agency among X and Y, which is an essential element, does not exist here. Since there is no partnership, the third party i.e. paper dealer cannot make Y liable for the paper supplied by him to X. (iii) No: Persons who share amongst themselves the rent derived from a piece of land are not partners, rather they are co- owners. Because, neither there is existence of business, nor mutual agency is there.