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Which of the following in itself is not sufficient to constitute a partnership?
the sharing of profits by persons having a joint or common interest
the receipt by a person of a share of the profits
the receipt by a person of a payment varying with the profits earned by business
all the above
- The sharing of profits by persons having a joint or common interest does not automatically create a partnership. There must also be intent to enter a business relationship together.
- The receipt by a person of a share of the profits doesn’t, by itself, indicate a partnership. For instance, an employee may receive a share of profits as a bonus without being a partner.
- The receipt by a person of a payment varying with the profits earned by a business is insufficient alone. For example, a lender may receive interest linked to profits, but not be a partner.
- All the above options are insufficient on their own to constitute a partnership.
By: santosh ProfileResourcesReport error
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