Question

Rose is an industrial partner, but aside from her services, she also contributed cash to the partnership. There is no agreement as to the distribution of profits or losses among the partners. The share of Rose in the profit should be:

a. As determined by the other partners
b. Pro-rata to her capital contribution
c. Such share as may be just and equitable under the circumstances
d. Combination of a and c
e. Combination of b and c

Answer 1

Rose's share in the profit of a general partnership without an agreement should be such share as may be just and equitable under the circumstances, which is normally an equal share to other partners.

Step-by-step explanation:

The student's question relates to the profit-sharing arrangement in a general partnership when there is no agreement in place. The options provided are to share profits as determined by the other partners, in proportion to Rose's capital contribution, or as may be just and equitable under the circumstances, or a combination of these methods.

According to the Uniform Partnership Act, which governs partnerships in the absence of a specific agreement, profits should be divided equally among partners regardless of the capital contribution unless there is a written agreement specifying otherwise. Hence, Rose's share in the profits should be such share as may be just and equitable under the circumstances, which is normally an equal share to other partners. This takes into consideration that the lack of an agreement defaults to the general rule of equal profit distribution amongst partners in a general partnership.