Which among the following is NOT true?

Analyzing each statement about partnership:

Option 1 is true. According to the Indian Partnership Act, 1932, a partnership can be formed through oral agreement. While a written partnership deed is advisable for clarity and evidence, it is not mandatory for creating a valid partnership.

Option 2 is true. This is a fundamental characteristic of partnership known as mutual agency. Each partner acts as an agent when conducting business on behalf of the firm (binding all partners) and simultaneously acts as a principal in their own capacity.

Option 3 is NOT true and is the correct answer. This statement contradicts Section 5 of the Indian Partnership Act, 1932, which clearly states that mere co-ownership of property does NOT constitute partnership.

For a valid partnership to exist, three essential elements must be present:

• Agreement between persons
• Agreement to carry on a business
• Agreement to share profits of that business

Co-ownership only creates a relationship regarding property rights. Without the element of carrying on a business together, there can be no partnership. For example, if two people jointly own a building, they are co-owners but not partners unless they actively carry on a business using that property.

Option 4 is true. This is the basic terminology defined in the Partnership Act - individuals are called 'partners' and their collective entity is called a 'firm'. The name under which they operate is the 'firm name'.