A partner is admitted into the firm with a guarantee of certain __________ amount by way of his share of profits of the firm.

Maximum

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Minimum

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Equal

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Both a and c

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Solution

The correct option is B Minimum
A minimum fixed amount for the partner who is given such a guarantee. If the actual share in profits is less than the guaranteed amount then the deficit amount shall be the firm or by any partner as the case may be. There are many ‘Adjustments’ which a firm will do in such a case. If the actual share in profits is more than the minimum guarantee amount then the firm will provide the actual profits to the partner.

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