PARTNERSHIP

1.  Partnership: When two or more than two persons run a business jointly, they are called partners and the deal is known as partnership.
2. Ratio of Division of Gains:
1.  When investments of all the partners are for the same time
• The gain or loss is distributed  a  among the partners in the ratio of their investments.
• Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at the end of the year:
• (A’s share of profit) : (B's share of profit) = x : y.
2. When investments are for different time periods, 
• Then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time). Now, gain or loss is divided in the ratio of  these capitals.
• Suppose A invests Rs. x for p months and B invests Rs. y for q months, then 
•  (A’s share of profit) : (B's share of profit) = xp : yq.
3. Working and Sleeping Partners: A partner who manages the business is known . as a working partner and the one who simply invests the money is a sleeping partner.

Ex 1. A, B and C started a business by investing Rs. 1,20,000, Rs. 1,35,000 and ,Rs.1,50,000 respectively. Find the share of each, out of an annual profit of Rs. 56,700. 

Sol. Ratio of shares of A, Band C = Ratio of their investments

= 120000 : 135000 : 150000 = 8 : 9 : 10.

A’s share = Rs. (56700 x (8/27))= Rs. 16800.

B's share = Rs. ( 56700 x (9/27)) = Rs. 18900.

C's share = Rs. ( 56700 x (10/27))=Rs. 21000.