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Calculation of New Profit Sharing Ratio on Retirement

Calculation of New Profit Sharing Ratio on Retirement :

Unless an intention to the contrary is expressed, the assumption should be made that on the retirement of a partner, the remaining partners continue to share profits and losses in the same relative ratio in which they were sharing profits and losses prior to retirement of the partner.

The absolute share of the remaining partners may increase but the ratio between the increased shares does not change because the increase itself is in that very ratio.

 

 

 

 

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