What are the formulas of partnership in business?

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In summary, partnership refers to a business arrangement where two or more individuals run a business together. The ratio of division of gains in a partnership is determined by the partners' investments, with equal investments resulting in equal shares of profit or loss. In cases where investments are made for different time periods, equivalent capitals are calculated and the gains or losses are divided accordingly. Additionally, there are two types of partners in a partnership - working partners who manage the business and sleeping partners who solely invest money. These concepts can be useful in solving mathematical problems.
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burgess
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1. Partnership : When two or more than two persons run a business jointly, they are called partners and the deal is known as partnership
2. Ratio of Division of Gains:
(i)When investments of all the partners are for the same time, the gain or loss is distributed among the partners in the ratio of their investments.
Suppose A and B invest Rs. x and Rs. y respectively for a year in a business, then at end of the year
(A's share of profit) : (B's share of profit) = x:y
(ii) When investments are for different time periods, then equivalent capitals are calculated for a unit of time by taking (capital x number of units of time).Now, gain or loss is divided in the ratio of these capitals.
Suppose A invests Rs. x for p months and B invests Rs. y for q months, then
(A's share of profit) : (B's share of profit) = px : qy
3. Working and Sleeping Partners:
A partner who manages the business is known as a working partner and the one who simply invests the money is a sleeping partner
I hope these concepts will be helpful for you to solve some of your math problems.
 
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  • #2
burgess said:
I hope these concepts will be helpful for you to solve some of your math problems.
Hopefully, thanks for sharing.
 

FAQ: What are the formulas of partnership in business?

What is a partnership?

A partnership is a type of business structure where two or more individuals share ownership and responsibility for a business.

What are the benefits of a partnership?

Some benefits of a partnership include shared decision-making, shared profits and losses, and the ability to combine skills and resources.

What are the different types of partnerships?

There are three main types of partnerships: general partnerships, limited partnerships, and limited liability partnerships. Each has its own unique characteristics and legal implications.

How are profits and losses divided in a partnership?

In most partnerships, profits and losses are divided according to the percentage of ownership each partner has. This is typically outlined in a partnership agreement.

What are the key elements of a partnership agreement?

A partnership agreement typically includes the names of the partners, the purpose of the partnership, the division of profits and losses, the roles and responsibilities of each partner, and any other important terms and conditions.

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