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Change in Profit Sharing Ratio Among the Existing Partners Video Lecture | Accountancy Class 12 - Commerce

49 videos|111 docs|56 tests

FAQs on Change in Profit Sharing Ratio Among the Existing Partners Video Lecture - Accountancy Class 12 - Commerce

1. What is profit sharing ratio among partners in a business?
Ans. Profit sharing ratio among partners refers to the proportion in which the profits of a business are divided among its partners. It determines how the profits will be shared among the partners and is usually agreed upon in a partnership agreement.
2. What factors can lead to a change in profit sharing ratio among existing partners?
Ans. There are several factors that can lead to a change in profit sharing ratio among existing partners. These include a change in the capital invested by partners, changes in the responsibilities and roles of partners, changes in the performance of partners, and changes in the terms of the partnership agreement.
3. How is the profit sharing ratio determined among existing partners?
Ans. The profit sharing ratio among existing partners is typically determined based on the terms of the partnership agreement. It can be based on factors such as the capital invested by each partner, the time and effort contributed by each partner, and the overall contribution of each partner to the business.
4. Can the profit sharing ratio among existing partners be changed without their consent?
Ans. Generally, the profit sharing ratio among existing partners cannot be changed without their consent. Any changes to the profit sharing ratio usually require the agreement and consent of all the partners. However, in some cases, the partnership agreement may include provisions that allow for changes in the profit sharing ratio under certain circumstances.
5. How can partners negotiate a change in the profit sharing ratio among themselves?
Ans. If partners wish to negotiate a change in the profit sharing ratio, they can do so by discussing the matter among themselves and reaching a mutual agreement. It is important to have open and transparent communication to ensure all partners are satisfied with the proposed changes. Once an agreement is reached, the changes can be formalized through an amendment to the partnership agreement.
49 videos|111 docs|56 tests

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