Manak was working as a construction contractor from several years. He engaged Roop Sing a labour and material contractor for procurement of raw…

CA Foundation · Business Laws · PYQS · January 2026
Manak was working as a construction contractor from several years. He engaged Roop Sing a labour and material contractor for procurement of raw material and labour for construction site. All the expenses pertaining to raw material, Labour wages will be borne by Manak. Manak agreed to give Roop Singh5% of the contract amount for procurement. Whether this arrangement will be termed as partnership? Explain according to provisions of the Indian Partnership Act, 1932?

Suggested Answer and Working Notes:

As per 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 (mutual agency). In the gives case, there was no agreement to share profit of the business. Manak was incurring all the expenses relating to the construction and Roop Singh is merely acting as an agent of Manak as he was receiving5% of the contract value. Therefore, this arrangement will not be termed as partnership.

Topics: The Indian Partnership Act, 1932

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