Multiple choice

Agreement to share profits ______________.

  1. implies an agreement to share losses

  2. does not necessarily mean an agreement to share losses

  3. must be coupled with an agreement to share losses

  4. is same as agreement to share losses
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An agreement to share profits does not automatically imply an agreement to share losses. Partners can structure their arrangements such that profit-sharing is independent of loss-bearing. This is a recognized principle in partnership law where the terms of the agreement determine the rights and obligations of the parties, not automatic implications from profit-sharing alone.

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