In the absence of any information regarding the acquisition of share in profits of the retiring/deceased partner by the remaining partners, it is assumed that they will acquire his/her share in________.
In the absence of any information regarding the acquisition of share in profits of the retiring/deceased partner by the remaining partners, it is assumed that they will acquire his/her share in________.
Solution
When a partner retires or dies and there is no specific agreement about how the remaining partners will acquire the outgoing partner's share, the default assumption is that they will acquire it in their old profit sharing ratio among themselves.
Understanding with an example:
Consider partners A, B, and C sharing profits in the ratio 3:2:1. If C retires with a share of :
The remaining partners A and B will acquire C's share in their old ratio (3:2 among themselves).
A's gain =
B's gain =
Gaining Ratio = = 3:2 (which is their old ratio)
The Gaining Ratio is simply the ratio in which the continuing partners acquire the share of the outgoing partner. In the absence of any agreement, this gaining ratio equals their old profit sharing ratio among themselves.
Therefore, both statements are correct:
- They acquire in their Old Profit Sharing Ratio (among remaining partners)
- This old ratio becomes their Gaining Ratio
Both options describe the same concept from different perspectives.
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