The dispute revolves around the agreement between partners A, B, and C regarding the sharing of profits and losses. In a partnership, partners have certain rights and obligations that are typically outlined in a partnership agreement. These agreements serve as legally binding documents, establishing the terms and conditions of the partnership.


One common method of distributing profits and losses in a partnership is based on the capital ratio. The capital ratio determines the proportion of capital contributed by each partner. According to this arrangement, partners' shares of profits and losses are distributed in proportion to their capital contributions.


Partners A and B have agreed to share profits and losses in the capital ratio, implying that their entitlement to profits and responsibility for losses will be determined by the amount of capital they have contributed to the partnership. This arrangement is in line with the general principles of partnership agreements.


However, partner C does not agree to share profits and losses in the capital ratio. It is unclear from the information provided whether C has proposed an alternative method or wishes to be excluded from the partnership's profit and loss distribution altogether.


To settle this dispute and reach a mutually agreeable solution, the partners should consider the following steps:

1. Review the Partnership Agreement: Examine the partnership agreement to determine whether it specifies the method of profit and loss sharing. If the agreement is silent on the issue, partners may negotiate and amend the agreement to reflect their desired terms.

2. Mediation or Arbitration: Engage in mediation or arbitration to facilitate a discussion between the partners and reach a consensus. This process involves the involvement of a neutral third party who assists in finding a resolution acceptable to all parties involved.

3. Reevaluate Partnership Contributions: Partners may reconsider the capital contributions made by each individual. If partner C believes their contribution warrants a different proportion of profits or losses, they can present their case and negotiate a revised agreement that better reflects their input.

4. Seek Legal Advice: If the dispute cannot be resolved through negotiation or mediation, partners may consider seeking legal advice. An attorney specializing in partnership law can provide guidance on the legal rights and obligations of each partner and suggest potential solutions or courses of action.


In a partnership, disputes over profit and loss sharing can arise when partners have differing opinions or preferences. Resolving such disputes requires careful review of the partnership agreement, open communication between partners, and potentially involving mediation or legal advice. Collaboration and compromise are key to reaching a fair and mutually beneficial solution that satisfies all partners involved.