Rajesh and prabhu entered into partnership to start a firm by writing a partnership deed. Rajesh invests more capital than prabhu and also manages the business rajesh demands that he should be. Given 75% of profit instead of 50% as agreed is his demand acceptable. Give reasons
Answers
The reason is: As per the Partnership Deed, Rajesh will be paid profit from the shares.
Explanation:
A partnership refers to the arrangement where two or more parties come together to cooperate in order to earn profit.
A Partnership Deed is a type of agreement that outlines in a document about their detailed information, rights and roles. This is basically designed to guide all the partners how to conduct business successfully.
Rajesh invested more capital than Prabhu and he also managed the firm operations. Rajesh demands that he should be given 75% of the profit instead of 50%.
As per the Partnership Deed, Rajesh will be paid profit from the shares.
Know more:
1. What is Partnership Deed ?
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2. A partnership Deed provides for payment of interest on capital but there was a loss instead of profit during the year 2016-17. At what rate will the interest on capital be allowed?
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