Question

in case of retirement, if full or part of the amount payable to the retiring partner still remains to be paid and there is no agreement among the partners then retiring partner will get
(i) interest 6%p.a on the balance amount
(ii) Share of profit earned proportionate to his amount outstanding to total capital of firm
(iii) interest 9%p.a on balance amount
(iv) both i and ii

Answer 1

In the case of retirement. where there is no agreement, the partners will (ii) share the profit earned proportionate to the amount outstanding to total capital of firm.

• When a company's partner retires, it is up to the continuing partners to decide on what ratio they will divide the company's profit and loss in the future.
• The ratio so agreed is known as the Current Profit Sharing Ratio.
• The continuing partners will share the profit or loss between themselves in the same ratio in which they shared prior to retirement, in the absence of any agreement.