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Forms of Business Organisation — Business Studies STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceBusiness StudiesForms of Business Organisation3 Marks
Question
Explain the concept of mutual agency in partnership with suitable example.
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Answer

The right of all the partners in a partnership to act as the agents for the partnership's normal business activities, with the authority to bind the partnership into business agreements which have been entered into is called mutual agency. This statement sums up the partnership relationship. The relationship should offer flexibility, opportunity and balanced against that, risk. In partnership you entrust to fellow partners your future reputation and prosperity. Each of us has within our power the ability to enter into undertakings which could bankrupt our fellow partners.

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