Sudhir and Vimal came into partnership with profit sharing ratio of 3…

Sudhir and Vimal came into partnership with profit sharing ratio of 3 : 2. Due to paucity of time, Sudhir was unable to give time to business so Vimal acted as principle and took all financial and operational decisions.

Due to break down of Covid 19, business suffered a loss of 4,00,000. State the amount of loss to be borne by Sudhir.

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Rs. 2,40,000

Partners share profits and losses in the ratio agreed among them. How much time a partner gives to the business does not change his share of the loss; the business of a firm may be carried on by any one partner acting for all, and the acts of that partner bind the others.

Sudhir's share of loss = Rs. 4,00,000 × 3/5 = Rs. 2,40,000
Vimal's share of loss = Rs. 4,00,000 × 2/5 = Rs. 1,60,000

Rs. 1,60,000 is Vimal's share, and Rs. 2,00,000 would apply only if the losses were shared equally.

NCERT (2026-27 edition):
Nature of Partnership – “… 5. Sharing of Profit: Another important element of partnership is that, the agreement between partners must be to share profits and losses of a business. Though the definition contained in the Partnership Act describes partnership as relation between people who agree to share the profits of a business, the sharing of loss is implied. Thus, sharing of profits and losses is important. If some persons join hands for the purpose of some charitable activity, it will not be termed as partnership.”

NCERT (2026-27 edition):
Nature of Partnership – “… 4. Mutual Agency: The business of a partnership concern may be carried on by all the partners or any of them acting for all. This statement has two important implications. First, every partner is entitled to participate in the conduct of the affairs of its business. Second, that there exists a relationship of mutual agency between all the partners. Each partner carrying on the business is the principal as well as the agent for all the other partners.”