5 (a).

The sharing of profits is a prima facie evidence and not a conclusive evidence of
partnership. Partners may share it equally or in any other proportion. Further, it is not necessary
that the partners should agree to share losses. It must be noted that even though a partner may not
share in the losses of the business, yet his liability towards outsiders shall be unlimited. A person
receiving profits is not necessarily a partner, such as: Lender of money to persons engaged or
about to engage in any business Servant or agent as remuneration Widow or child of a deceased
partner as annuity A transferee of a partner’s interest A minor who is admitted to the benefits of
an existing partnership Previous owner or part owner as consideration for the sale of goodwill or
share of it.
(b). Aslam has no legal ground of suing Ibad on the basis of breach of contract as the two are
partners under the banner of Mutual agency. Under this banner, it is known that both parties are
agents and principals to the business and thus the action of one is considered the action of the
other party. In this regard, it is close to impossible to say that the business failed or event that the
money loaned out was misused or lost in other ways, rather, it is a business liability in the
business owned by the two.

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