General Aptitude: Partnership Business

 Partnership:

Definition: When two or more two persons/partners invest in a business for a certain time, to get some profit, that’s called partnership. Or When two or more people invest money in a business, persons are called Partners, their relationship is called Partnership, and money/amount invested is called Capital.

Types of Partnership:

1. simple partnership: If they invest money for the same time, it is called a simple partnership.
2. compound partnership: If they invest money for different times, it is called compound partnership. 

Types of partners:

Active partner: The person, who invests his money as well as his time in the business is called an active partner.

Sleeping partner: The person, who invests only his money, not the time is called a sleeping partner.

Note: Active partners always get a salary for managing the business, and that salary is given from the profit earned.

Important concepts:

1. Profit is directly proportional to Time and Investments.
2. If two partners A and B invest capitals C_A and C_B and invest their money for T_A and T_B time periods respectively. Then the Ratio of their respective shares in Profit: P_A : P_B = (C_A x T_A) : (C_B x T_B)
3. If two partners A, B, and C invest capitals C_A, C_B, and C_C and invest their money for T_A, T_B, and T_C time periods respectively. Then the Ratio of their respective shares in Profit: P_A : P_B : P_C = (C_A x T_A) : (C_B x T_B) : (C_c x T_c)

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