1. Section 4 Definition
- Agreement between persons.
- Business.
- Sharing of profits.
- Mutual agency.
2. True Test
- Mutual agency is the conclusive test.
- Every partner is both principal and agent.
3. Partnership vs Status
- Partnership arises from contract, not status.
- Family relationship alone does not create partnership.
4. Partnership vs Co-ownership
- Co-ownership may arise without agreement.
- Profit sharing and mutual agency distinguish partnership.
5. Types of Partners
- Active.
- Sleeping.
- Nominal.
- Partner in profits only.
- Minor admitted to benefits.
- Partner by estoppel or holding out.
6. Types of Partnership
- Partnership at will.
- Particular partnership.
- Fixed-term partnership.
7. Firm and Firm Name
- Partners collectively are called a firm.
- Firm is not fully separate from partners under the Partnership Act.
8. Minor
- Cannot become a full partner.
- May be admitted to benefits with consent of all partners.
- Personal liability arises only after election on majority.
9. Exam Test
- Is there an agreement?
- Is there a business?
- Are profits shared?
- Does mutual agency exist?
Core Memory: Profit sharing is evidence; mutual agency is the decisive test of partnership.
