Which of the following statements regarding partnership rules is NOT true?
- AA valid partnership can be formed even without a written agreement between the partners.
- BEach partner carrying on the business is both a principal and an agent for all other partners.
- CMere co-ownership of a property automatically amounts to a partnership.
- DPersons who have entered into a partnership with one another are individually called 'partners' and collectively called a 'firm'.
Solution & Step-by-step Explanation
Let us evaluate each statement carefully:Statement A (True): A partnership agreement can be oral or written. A written agreement is not a legal requirement.Statement B (True): This describes the doctrine of mutual agency, a core feature of partnerships.Statement C (False): Jointly owning a property (co-ownership) does not automatically create a partnership. A partnership requires a clear agreement to run a business with the intent to generate and share profits. For example, two siblings inheriting a house are co-owners, but they are not partners unless they operate a business from it.Statement D (True): This correctly defines the standard legal terminology used for partnerships.Therefore, statement C is the incorrect statement.