Partnership : When two or more than two persons called partners and the run a business jointiy they are deal is known as partnership.
Ratio of Division of Gains :
When investments of all the partners are for the same time, the gain or loss is
distributed among the partners in the ratio of their investments.
Suppose A and B invest Rs. x and Rs. y respectively for a year in a business,
then at the end of the year
(A's share of profit) : (B's share of profit) = x : y.
When investments are for different time periods, then equivalent capitals are
calculated for a unit of time by taking (capital x number of units of time). Now,
gain or loss is divided in the ratio of these capitals.
Suppose A invests Rs. x for p months and B invests Rs. y for q months, then
(A's share of profit) : (B's share of profit) = xp : yq.
Working and Sleeping Partners : A partner who manages the business is known
as a working partner and the one who simply invests the money is a sleeping partner.