Question

When a partner is exempted to share losses?

Answer 1

The partnership, where one or two partners are exempted from sharing losses of the firm are rare but are in existence.

Technically partners who are minors do not share losses.

Under special circumstances when a partner is bringing his knowledge or knowhow as capital (but not in fiscal terms ) and working to further the interest of partnership, he may be allowed to share profits but not losses of the firm.

Such partnerships exist these days in I.T. firms and other firms where technological expertise contribute a lot for the existence and profitability of the firm.