Section 5 of the Indian Contracts Act clearly states that it is the agreement, not the statute, that is the basis of a partnership. This means that the partnership is the result of a contract, not a status. For example- A husband of Jain and a woman who are on a Hindu family sub-business are not partners in such a venture, because there is no partnership agreement between them. Finally, I found the paper as repetitive and very general. It could have been a little more concrete. Nevertheless, I found some parts of the research article that were interesting to read. It was well written in that sense. I also learned some new jurisprudence that I do not know at first. Another thing I liked was the frequency of case law. The author had made sure to insert important case law almost on each side, which made the reading of this document pleasant and at the same time expert. Overall, I would say that the author`s main/objective objective, which was to determine what constitutes a relationship, was partly achieved by him.
This article was written by Prasam Jain of Symbiosis Law School, Noida. This article discusses the forms of determination of the existence of Partnership: Comprehensive Study. There is a debate about what a legally binding treaty is. Many legal experts believe that, to some extent, the common law has always required an objective test by an impartial third party to determine the validity of an agreement. Some scholars argue that objective theory is only a new evolution and that precedent requires that long-term subjective theory be still applied in court. In accordance with Section 6, the actual attention between the parties should be taken into account by examining the relevant facts and at the same time noting the existence of a partnership. This rule does not seem as simple as it is indicated, its application is a complicated part. Thus, we can conclude that Section 6 has done a good job of protecting the interests of the parties involved.
It is not easy, it seems, but almost all the situations that have caused difficulties in determining the nature of the partnership`s existence have been discussed. Sharing a company`s profits is an essential part of a partnership. Profit sharing also involves sharing losses, but sharing is not necessarily equal. Partners can agree to share the benefits in any way they like. But profit sharing doesn`t make anyone a partner. This is only apparent evidence of a partnership. The final test is that of the freedom of mutual choice. On the merits, it can be concluded that an agent or representative who receives a share of the profits as compensation, a seller of the value of a company that receives a share of the profits in return for the sale of the value, is not the sole partner on the basis of such facts. Profit sharing is one facet of the true test of a partnership. However, profit sharing is only clear evidence of a partnership.
But the law does not consider it to be evidence due to the emergence of certain cases of interest in which the interest was considered a contradiction with the partnership. Let`s take a look at a pioneering case where profit sharing was not seen as a true test of partnership.