Which combination of statements is true about partnership-

(A) Valid partnership can be formulated even without a written agreement between the partners.

(B) Methods of settlement of disputes among the partners can't be part of the partnership deed.

(C) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner.

(D) Each partner carrying on the business is the principal as well as the agent for all the other partners.

Choose the correct answer from the options given below:

Let me evaluate each statement about partnership:

Statement (A): Valid partnership can be formulated even without a written agreement between the partners.

TRUE - Under the Indian Partnership Act, 1932, a partnership can be formed through oral agreement or even implied from conduct of partners. A written partnership deed, though advisable, is not mandatory for a valid partnership.

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Statement (B): Methods of settlement of disputes among the partners can't be part of the partnership deed.

FALSE - Methods of settlement of disputes (such as arbitration clauses) can very well be included in the partnership deed. In fact, it is a common and recommended provision.

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Statement (C): If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner.

FALSE - As per the Partnership Act, when the deed is silent:

• No interest is charged on drawings
• No interest is allowed on capital
• Interest on partner's loan to firm is 6% p.a.

The 6% rate applies to loans given by partners to the firm, not on drawings.

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Statement (D): Each partner carrying on the business is the principal as well as the agent for all the other partners.

TRUE - This is a fundamental characteristic of partnership. Every partner acts as an agent (can bind the firm through his actions) and also as principal (shares ownership, profits, and losses).

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The correct combination is (A) and (D) only.

Correct Answer: Option 1