Partners must share profits and losses equally.

Question

State whether the following statement is True or False.

Partners must share profits and losses equally.

Options

• True
• False

Answer 1

False

Explanation: It is not mandatory for partners to share profits and losses equally. They can share the profit/loss in any ratio as decided between them. The profits or losses will be distributed equally only when then there is an agreement to such effect or when the partnership deed is silent in this regard.