The correct answer is D. All of the above.
Sharing of profits is one of the most common ways to prove that a partnership exists. However, it is not the only way. Mutual agency, which means that the partners have the authority to act on behalf of the partnership, is also considered conclusive evidence of partnership. Finally, carrying on some business is also evidence of partnership, even if the business is not profitable.
In order to prove that a partnership exists, it is not necessary to show that all three of these factors are present. However, if all three factors are present, it is very strong evidence that a partnership exists.
Here are some additional details about each of the three factors:
- Sharing of profits: This is the most common way to prove that a partnership exists. If two or more people agree to share the profits of a business, they are likely partners. However, it is important to note that sharing profits is not always conclusive evidence of partnership. For example, if two people are married and they share the profits of their business, this does not necessarily mean that they are partners.
- Mutual agency: This means that the partners have the authority to act on behalf of the partnership. For example, if one partner signs a contract on behalf of the partnership, the other partners are bound by the contract. Mutual agency is another common way to prove that a partnership exists.
- Carrying on some business: This means that the partners are actively involved in running the business. They may be involved in day-to-day operations, or they may be involved in making major decisions about the business. Carrying on some business is not always conclusive evidence of partnership, but it is strong evidence.
If you are unsure whether or not a partnership exists, it is best to consult with an attorney.