What is meant by guarantee of profit to a partner?

1.	What is meant by guarantee of profit to a partner?
Answer» Guarantee of Profit to a Partner: Sometimes, a partner is admitted into the firm who is having a specialized knowledge in a particular field, e.g., sales and marketing, professional efficiency of specific type, etc. Such type of partner wants a minimum guaranteed amount as share in the profits of the business from the other partners. Such a guarantee is given either by: (a) one of the old partner or (b) all the partners in a certain ratio. Such type of guarantee can be given in four ways as follows: Guarantee by the firm Guarantee by a partner Guarantee by a partner to the firm Guarantee by a partner to the firm and guarantee by firm to a partner So, it is called guarantee of profit to a partner.

Answer»

Guarantee of Profit to a Partner: Sometimes, a partner is admitted into the firm who is having a specialized knowledge in a particular field, e.g., sales and marketing, professional efficiency of specific type, etc. Such type of partner wants a minimum guaranteed amount as share in the profits of the business from the other partners.

Such a guarantee is given either by:
(a) one of the old partner or
(b) all the partners in a certain ratio.

Such type of guarantee can be given in four ways as follows:

Guarantee by the firm
Guarantee by a partner
Guarantee by a partner to the firm
Guarantee by a partner to the firm and guarantee by firm to a partner So, it is called guarantee of profit to a partner.

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