David and Gill share profits from their partnership 70/30. Last year, the partnership made $250,000 in profits. The $250,000 is net after Gill's salary of $50,000. If David and Gill have no written agreement about losses, how will the law presume they are to share losses, if any, in the future?

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Business

Nico Jarvis

23 May, 02:45

David and Gill share profits from their partnership 70/30. Last year, the partnership made $250,000 in profits. The $250,000 is net after Gill's salary of $50,000. If David and Gill have no written agreement about losses, how will the law presume they are to share losses, if any, in the future?

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Marlie Duffy · Answer 1

Profits and losses will be shared equally

Explanation:

A partnership is a form of business ownership where two or more parties combine efforts to do business. The members of the partnership share the profits and losses arising from the business.

In ordinary circumstances, profits and losses will be shared as agreed by the partners and recorded in the partnership deed.

If the partnership deed is silent on the profit or loss sharing ratio, the law provides that profits and losses be shared equally. Sometimes a partnership deed may specify the formula for sharing of either losses or profits. A specification on profits does not imply that losses will follow suit. If losses occur, they will be shared equally