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Questions and Answers
Match the partner's share in profits without agreement with the correct statement:
Match the partner's share in profits without agreement with the correct statement:
Industrial Partner = Shall receive such contribution share as may be just and equitable under the circumstances Capitalist Partner = In proportion to his agreement
Match the obligations of industrial partners with the correct statement:
Match the obligations of industrial partners with the correct statement:
Shall not be liable for losses in absence of agreement as to profits and losses = Exception: in the absence of agreement, the industrial partner shall not be liable for losses Receives contribution share in proportion to circumstances = Shares in the profits according to agreement
Match the obligations of capitalist partners with the correct statement:
Match the obligations of capitalist partners with the correct statement:
Shares in the profits according to agreement = Capitalist Partner Not liable for losses without agreement as to profits and losses = Exception: in the absence of agreement, the industrial partner shall not be liable for losses
Match the distribution of losses in partnership with the correct statement:
Match the distribution of losses in partnership with the correct statement:
Match the distribution of profits in partnership with the correct statement:
Match the distribution of profits in partnership with the correct statement:
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Study Notes
Rules for Distribution of Profits and Losses of a Partnership
- Distribution of profits is done in conformity with the agreement.
- If there is no agreement, capitalist partners receive profits in proportion to their contribution to the common fund.
- If there is no agreement, industrial partners receive profits in a just and equitable manner under the circumstances.
Distribution of Losses
- Distribution of losses is done in conformity with the agreement.
- If the only agreement pertains to the share of each partner in the profits, the share of each in the losses shall be in the same proportion.
- If there is no agreement, capitalist partners bear losses in proportion to their contribution to the common fund.
- Industrial partners are not liable for losses.
Management of the Partnership
- Either one, some, or all of the partners designated as managing partner/s can manage the partnership, either in the articles of partnership or after the contract of partnership had already been constituted.
- If there is no agreement, management is vested in all of the partners.
Property Rights of a Partner
- A partner has rights in specific partnership property.
- A partner has an interest in the partnership.
- A partner has the right to participate in the management.
Capitalist Partner vs. Industrial Partner
- A capitalist partner shares profits according to the agreement, and if there is no agreement, in proportion to their contribution.
- A capitalist partner bears losses according to the agreement, and if there is no agreement, in proportion to their contribution.
- An industrial partner shares profits in a just and equitable manner under the circumstances.
- An industrial partner is not liable for losses.
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