Lisa and John own a partnership that provides rental equipment for parties and s

Question

Lisa and John own a partnership that provides rental equipment for parties and special occasions. Which of the following is true about the way Lisa and John would handle company profits? a. Split the profits according to how many hours each person worked. b. Divide the profits according to each person's investment in the business. c. Distribute the profits according to the terms of the partnership agreement. d. They would do nothing because partnerships require that profits remain in the business. e. Automatically split the profits, with 50 percent for Lisa and 50 percent for John.

Explanation / Answer

Answer = Distribute the profits according to the terms of the partnership agreement.

Written agreement between at least two people who join as accomplices to shape and carry on a revenue driven business. In addition to other things, it expresses the (1) idea of the business, (2) capital contributed by each accomplice, and (3) their rights and obligations. An association does not have a different lawful presence like a consolidated firm, and the accomplices are together and severally obligated for the obligations of the firm. Indeed, even on pulling back from the association they stay obligated for as of now brought about obligations, and for future obligations except if a legitimate notice of retirement is distributed. A substantial organization, be that as it may, can exist without a composed understanding in which case the arrangements of the statutes representing associations would apply.

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