Is it necessary for all the partners to borne deficiency to meet the condition of guaranteed profit to the other partner?
Answer & explanation
Correct answer: option 4
Sometimes a partner is admitted into the firm with a guarantee of certain
minimum amount by way of his share of profits of the firm. Such assurance
may be given by all the old partners in a certain ratio or by any of the old
partners, individually to the new partner. The minimum guaranteed amount
shall be paid to such new partner when his share of profit as per the profit
sharing ratio is less than the guaranteed amount.