Amit and Ajay started the business of wholesale trading of sugar. For this purpose, they contributed - 3,00,000 and - 1,00,000 respectively.…

Section 13(b) of the Indian Partnership Act,1932 provides, partners are entitled to share equally in the profits earned and so contribute equally to the losses sustained by the firm. The amount of a partner’s share must be ascertained as per the agreement between the partners. If there is no agreement, then every partner is bound to contribute equally for the Firm’s business. There is no connection between the proportion in which the partners shall share the profits and the proportion in which they have contributed towards the capital of the firm. In the instant case, Ajay wanted to contribute only25% to the loss i.e. in the ratio of capital contribution while Amit requested for equal share in loss. On the basis of above provisions and facts of the problem given, Ajay must share the loss equally as there was no agreement between partners regarding sharing of profit. Ratio of capital contribution is not related with ratio of sharing profit.