Question

When a partner is given guarantee by the other partners, loss on such guarantee will be borne by _______________.

• A. Partnership firm
• B. All the other partners
• C. Partners who gave the guarantee
• D. Partner with highest profit sharing ratio

Answer 1

Answer: (C)

Partners who gave the guarantee

Guarantee means the surety of a particular amount of profits by one or more partners and in some cases by the firm, where the burden of guarantee is borne by the party providing such a guarantee. In other words, it is a minimum fixed amount for the partner who is given such a guarantee.