SETTLEMENT ON RETIREMENT

If he did not share the profits of the firm, how was he being compensated? Through a fixed salary?

To give any advice it is better to go through the settled terms of partnership deed. As a general question, when you are finalising annual accounts of the partnership firm, the profit is devided between all partners and transferred to their capital account except the provisions.

Ram

Dear Mr. Sanjay & Ram

thanks for the response

in this case A was only a sleeping partner ; he did not receieve any fixed monthly compensation

Dear Mr. Sanjay / Mr. Ram

I am still expecting a response

Mr. Vijaynarayan,

The deed of partnership is of atmost importance. The deed will give the profit sharing ratio/profits to be shared or not ..................if the deed is silent on the same then the normal procedure is to understand the process in which the partners were sharing profits or getting remuneration from the firm. The same will give you a good idea as to the profit sharing ratio. 

As you have stated not paid/ not taken......i fail to understand that

i) was the partner not being paid and still to claim or

ii) was being offered profits but not taken or declined the same.

The same has to be understood by strictly relying on the deed of partnership.  

Dear Mr.Robin

Thanks for the response

the following is the position

1. as per partnership deed - share in profits =10%

2. as per retirement deed :  retirement wef 31-07-2009; and settlement will be done at a later date.

3. as already stated : was a silent partner. no renumeration was offered / taken.

4. profits for 31 -03 -2007/ 08 / 09 & up to 31 -07 -2009 was not offered ( and not  declined)

.  

Mr. Vijaynarayan, I think you are right & you must claim for share profits.