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If there is no partnership deed then profits will be shared in which ratio?

Answer and explanation

Correct answer: Equally

When partners have not made a partnership deed, the applicable default rules of the Partnership Act govern their mutual rights. One important rule is that, in the absence of an agreement to the contrary, partners share profits and losses equally, regardless of the amount of capital contributed by each partner. For example, if two partners earn a profit of ₹40,000, each receives ₹20,000; if there are four partners, each receives one-fourth, subject to the governing law. Therefore option A is correct. Capital ratio is not automatically used, and salary ratio or loan ratio is not a standard basis for distributing partnership profit. The deed could have specified another ratio, but no deed means the statutory default applies.

Related tags

Absence Of DeedProfit SharingPartnership ActPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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