- Partnership:When two or more than two persons run a business jointly, they are called partnersand the deal is known as partnership.
- Ratio of Divisions of Gains:
- When investments of all the partners are for the same time, the gain or loss is distributed among the partners in the ratio of their investments.Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at the end of the year:(A's share of profit) : (B's share of profit) = x : y.
- When investments are for different time periods, then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time). Now gain or loss is divided in the ratio of these capitals.Suppose A invests Rs. x for p months and B invests Rs. y for q months then,(A's share of profit) : (B's share of profit)= xp : yq.
- Working and Sleeping Partners:A partner who manages the the business is known as a working partner and the one who simply invests the money is a sleeping partner.
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