Partnership: Losses are shared

Losses are shared

If the business suffers losses then the partners have to share the losses equally. The partners have to share the loss even if the loss was due to the decision made by one partner. Partners are held responsible for the acts of each other. If the business suffers a loss of $10,000 and there are 5 partners then the each partner will have to suffer a loss of only $2000 each. If the sole trader suffers a loss of $10,000 then he or she will have to bear the entire loss.

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