PROFIT AND LOSS SHARING IN THE PARTNERSHIP AGREEMENT UNDER THE NEW ROMANIAN CIVIL CODE
DOI:
https://doi.org/10.15837/aijjs.v7i2.524Keywords:
profit sharing, loss sharing, essential condition, rule of proportionalityAbstract
The new Romanian Civil Code regulations have reconfirmed the rule ofproportionality when speaking about profit and loss in a partnership agreement. Basically,
the law does not require that the participation of partners in profit and loss be necessarily
proportional to their contribution to the society’s capital and the associates can even
determine their share of benefits and losses. In case the associates establish by contract only
their share of benefits, then their contribution to losses will become proportional to their
profit share. If the share of profit is not proportionally equal with the contribution, then the
contribution to debts will be proportional with the profit share and not with the contribution
brought to the capital.
One must keep in mind as compulsory the condition that each partner should
participate both in profit and loss sharing. On the one hand, a partner cannot reserve all the
benefit for himself only, while on the other hand the partners cannot decide that one or
several of them are exempted from participating in loss sharing. Also, they cannot set a
provision by which a partner is excluded wither from profit sharing or from participation in
loss, as this provision would be void ab initio.
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