Pratibha, Divyanka and Ananya are partners in a firm. At the time of the division of profit for the year, there was a dispute between the partners. Profit before interest in partner’s capital was Rs. 6,00,000 and Ananya demanded a minimum profit of Rs. 5,00,000 as her financial position was not good. However, there was no written agreement on this point.

A partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses, interest-based organizations, schools, governments or combinations.