Notes on

Partnership

1
www.byjusexamprep.com

Partnership
Partnership: When two or more persons run a business jointly, they are called partners
and the deal is known as partnership.
Note: Partnership business is run for profit, therefore there must be a profit in the business
after a certain period of the time.
Division of the profit at the end of the certain period of time:
Ex: Suppose A and B invest Rs. a and Rs. b respectively for 1 year in a business, then at
the end of the year
(Share of A in the profit) : (Share of B in the profit) = a : b.
Ex: A and B started a business with total investment of Rs. 9600. If at the end of the year
the share of B is Rs. 3850 in the total profit of Rs. 6600. Find A’s investment.
Sol: Let the investment of A be Rs. A, then investment of B = Rs. (9600 – A)
According to question
9600 –A
× 6600 = 3850
9600
On solving this, we get,
A = 4000

Case II: When investments of all the partners are for different time periods, then
equivalent capitals (Capital × Number of units of time) are calculated for a unit of time by
taking. Now, profit or loss is divided in the ratio of these equivalent capitals.
Ex: Suppose A invests Rs. a for x months and B invests Rs. b for y months, then
(Share of A in the profit) : (Share of B in the profit) = xa : yb.
Ex: A and B started a business. B invests Rs.200 more than A and left after 6 months of
the start of the business. From the total annual profit of Rs.2800, A’s profit is Rs.1600.
Find B’s investment.
Sol: Let B invests Rs.x, then A invests = x – 200
Ratio of equivalent capitals of A and B = x × 12 : (x – 200) × 6 = 2x : (x – 200)
According to question
Profit of A = Rs. 1600
2x x – 200
=
1600 2800−1600
 6 × 2x = 8 × (x – 200)
 x = 400
Hence, the investment of B = x = Rs.400.

Case III: Working and Sleeping Partner: A partner who manages the business or
involve in working of the business is known as working partner and the one who only
invests the money but does not involve in working of the business is a known as sleeping
partner. In this case working partners get salary or part of profit and that will be mention
in question.
Ex: A and B start a business with investments Rs. 45000 and Rs. 105000. If A is paid
Rs.4000 per month for taking care of business and at the end of the year the profit of A is
Rs. 8000 less than that of B, then what is profit of B in the business?
Sol: Let profit of B at the end of the year = Rs. B
Total salary of A = 12 × 4000 = Rs. 48000
According to question
45000 105000
=
B − 8000 − 48000 B
3 7
 =
B − 56000 B
Hence, profit of B in the business = Rs. 98000

2
www.byjusexamprep.com

Case IV: Sometimes the distribution of total profit is defined then we will follow
the instructions given in the question.
Ex: A started a business with capital Rs. 40000 and after 4 months B joins the business
with capital Rs. 75000. At the end of the year 40% of profit is the equally divided between
them and the rest is divided in proportion of their investments. If at the end of the year,
the profit of B is Rs. 6000 more than that of A, then what is the total profit at the end of
the year?
Sol: Ratio of equivalent capitals of A and B = 40000 × 12 : 75000 × 8 = 4 : 5
Let the total profit at the end of the year be Rs. 100X, then
4 140x
Profits of A = 20x + × 60x =
(4 + 5) 3
5 160x
Profits of B = 20x + × 60x =
(4 + 5) 3
According to question
160x 140x
– = 6000
3 3
20x
 = 6000
3
 x = 900
Hence, the total profit at the end of the year = 100x = 100 × 900 = Rs. 90000.

3
4