CAF-4 · Chapter 12 · Question 3 of 10
Adeel and Kashif are partners. Their agreement states they will share profits in a 3:2 ratio but is completely silent on how losses will be shared. In case of a loss, how should it be divided?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Losses will be shared in the same 3:2 ratio as profits.
Explanation
If the partnership agreement specifies a profit-sharing ratio but is silent regarding losses, the law implies that the partners will share losses in the exact same proportion as they share profits.
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