If the deed requires partners to maintain equal capital, how will excess or deficient capital be settled?

Correct answer: Adjustment will be made as per the deed

Direct answer: Option A, adjustment will be made according to the deed. Equal capital means the partners are required to keep their agreed capital balances equal, not that the profit-sharing ratio automatically becomes equal. Reasoning: compare the partners’ capital balances; find the excess or deficiency; then use the method stated in the deed, such as bringing in cash, withdrawing excess, or transferring an agreed amount. Option A is correct because the deed supplies the governing method. Option B is wrong because capital equality does not automatically alter the profit ratio. Option C is wrong because a capital difference does not by itself dissolve the firm. Option D is wrong because drawings remain subject to their own terms and are not automatically forgiven. If the deed gives no method, the partners may need to agree on a practical adjustment. Memory cue: equal capital affects capital accounts, not automatically profit shares.