5. Sharing Of Profits

Question 1

Sharing of profits

Answer 1

1. Not necessarily in equal shares
2. Not conclusive evidence of partnership

Question 2

Rules on division of profit and loss if CAPITALIST partner

Answer 2

1. P&L shall be divided according to their agreement
2. If only sharing of the partners profit are shared, it will also apply to loss
3. If both P&L are not stated, it shall be proportion on their capital contribution.

Question 3

Rules on division of profit and loss if there’s CAPITALIST AND INDUSTRIAL partner

Answer 3

1. P&L shall be divided according to their agreement
2. In absence of agreement, the industrial partner shall receive the share in the profit first, (which is to be decided by partners) then follows by capitalist partner: it shall be proportion on their capital contribution.
3. Industrial partner shall not share the loss unlike capitalist partner
4. For Capitalist partner, If only sharing of the partners profit are shared, it will also apply to loss.

Question 4

Rules on division of profit if there’s CAPITALIST AND CAPITALIST - INDUSTRIAL partner

Answer 4

1. Shall be divided according to their agreement
2. Capitalist industrial partner shall first received his equitable share as an industrial partner, then the Capitalist partner will follow (including the capitalist industrial partner), according to their capital contribution.

Question 5

Rules on division of loss if there’s CAPITALIST AND CAPITALIST – INDUSTRIAL partner

Answer 5

1. Shall be divided according to their agreement,
2. In case of absence of agreement, the loss will be proportion to their capital contribution, while capitalist industrial partner will only bear in his capacity as capitalist partner.
3. Industrial partner shall not borne any loss.

Question 6

Rules in PROFIT SHARING:

Answer 6

1. The partners share the profits in accordance with the ratio established by their contract.
2. If only the share on the profits is agreed upon, the share of each partner for the losses will follow that agreement.
3. If there is no such stipulation in the partnership contract, then:

a. If all are capitalist partners, they have the profits in proportion to their capital contributions ticapital share or interest)

b. If there are capitalist as well as industrial partners, the industrial partner get a share each that is just and equitable while the capitalist partners divide the remainder in proportion to their capital contributions; and

c. If there is a capitalist-industrial partner, he gets a share in the profits as an industrial partner and an additional share in proportion to his capital contribution to be determined as in tib), above.

Question 7

Rules in LOSS SHARING:

Answer 7

1. The stipulation in the partnership agreement regarding loss sharing must be followed..
2. If there is no such agreement, but the contract provides for a profit-sharing ration, the profit- sharing ratio shall also be the loss sharing ration.
3. In the absence of loss sharing and profit-sharing stipulations in the contract, then the loss shall be borne by the partners in proportion to their capital contributions; but a purely industrial partner is exempted from participation in the loss

Question 8

P&L if the business entrusted to a third person by the partners.

Answer 8

May be impugned if he’s become inequitable, however, cannot be question by the partner who has begun to execute it and when three months has already passed after the knowledge (of being inequitable by the 3rd person) obtained by any partners.

Question 9

means to challenge or criticize something, typically a statement or claim, in order to cast doubt on its validity or truthfulness. It’s like questioning the accuracy or integrity of something.

Answer 9

Impugned

Question 10

P&L if the business entrusted to a partner

Answer 10

The designation is void, because it can’t be entrusted to one partner only and should divide the P&L to all Partners accordingly.