Question

Explain the concept of mutual agency in partnership with suitable example.​

Answer 1

Answer:

Mutual Agency :

Mutual Agency is one of the feature of a partnership firm. The definition of partnership highlights the fact that it is a business carried on by all or any one of the partners acting for all. In other words, every partner is both an agent and a principal to firm. He is an agent of other partners as he represents them and thereby binds them through his acts. And he is a principal too for bounding the actions of other partners.

Partnership :

Partner ship is defined as an association of 2 or more persons who agree to carry on a business together and share the profit as well as bear risks collectively.

Features of Partnership firm are :

• Formation

• Liability

• Risk bearing

• Desicion making and control

• Continuity

• Number of partners

• Mutual Agency

• Secrecy

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