An association of two or more persons, who put their money together in order to carry on a certain business is known as partnership.

After a certain time they distribute the profit or loss of the business in the ratio of their investments.

The persons who put their money in a business under the

Partnership are known as partners.

**There are two types of partners**

**1. Active Partners** A partner who manages the business is known as an active partner.

**2. Sleeping Partners** A partner who provides capital but does not involve directly in the business is known as a sleeping partner.

There are also two types of partnership.

**Simple Partnership**

If the capitals of the partners are invested for the same time, the partnership is known as simple partnership.

In this type of partnership, the profit or loss of the business is distributed among the investors in the ratio of their invested money.

**Ex. 1 Seema, Sonia and Akshita opened shop in partrmership with their investment 27000, 7 81000 and 7 72000 respectively. Profit was distributed between them at the end of the years. If share of Sonia is 36000 in profit, then total profit was**

(a) 80000

(b) 98000

(c) 108000

(d) 116000

**Compound Partnership**

If the capitals of the partners are invested for different span of time, the partnership is known as compound

partnership.

In this type of partnership, profit or loss of the business is distributed in the ratio of product of their investments and time for which money is invested.

**Ex: A and B started a business by investing 10400 and 14300 in partnership. After 4 months C had joined them by investing 9100. If total profit in the end of year was 11360, then share of C in profit was**

(a) 2520

(b) 32240

(c) 2660

(d) 2100

## Important Formulae

### Formula 1

**Ex: A, B and C invested capitals in the ratio of 2:3:5. At the end of the business terms, they received the profit in the ratio of 5: 3:12. Find the ratio of time for which they contributed their capitals.**

(a) 25: 10:24

(b) 15:18:7

(c) 29: 15:16

(d) 18:3:5

### Formula 2

**Ex:A, B and C each does certain investments for time periods in the ratio of 5:6:8. At the end of the business terms, they received the profits in the ratio if 5:3:12. Find the ratio of investments of A, B and C.**

(a)4:1:3

(b)4:3:1

(c)2:1:3

(d)3:1:2