Question

Guarantee given to a partner 'A' by the other partners 'B & C' means _________________.

• A. In case of loss 'A' will not contribute towards that loss.
• B. In case of insufficient profits 'A' will receive only the minimum guarantee amount.
• C. In case of loss or insufficient profits 'A' will receive the minimum guarantee amount.
• D. All of the above.

Answer 1

The correct option is C In case of loss or insufficient profits 'A' will receive the minimum guarantee amount.

Guarantee given to a partner means partner will be given a fixed minimum amount of profit. and if any deficiency arise will be met by the other partner. So in this A is given guarantee of minimum amount and if there is loss or insufficient profit then B and C will pay the amount remaining short.