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Question
Ritesh and Hitesh are childhood friends. Ritesh is a consultant whereas Hitesh is an architect. They contributed equal amounts and purchased a building for Rs 2 crores. After a year, they sold it for Rs 3 crores and shared the profits equally. Are they doing the business in partnership? Give reason in support of your answer.
Solution
No, the relationship between Ritesh and Hitesh cannot be called as Partnership but would be they regarded as the co-owners. This is because Partnership requires the partners to conduct the business on a regular basis and share the profits from the same whereas in this case, this is a one-time activity.
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