188 FARM ACCOUNTING 



from each Drawing account to the respective Capital ac- 

 counts. This increases the capital of the business and 

 keeps the Capital accounts equal. If capital is inv 

 two-thirds and one-third, then the transfer from Drawing 

 accounts is made so as to maintain that proportion. A 

 provision should be made in the partnership agreement t<> 

 the effect that no partner may draw more than a specified 

 amount from the business until after it is definitely know . 

 what the net gain or loss is for the period. No par 

 should be permitted to draw an amount greater than his 

 share of the gain. 



Partnership Legal Difficulties. There are a great many 

 legal difficulties arising in partnership affairs. One si 

 not enter into partnership with one whose honesty or in- 

 tegrity he has the least reason to question. The court 

 decisions indicate that it is possible for one partner to 

 incur debts for the partnership which the other partner 

 mijrht have to pay. It is a principle of law that any part- 

 ner is liable for all the debts of the firm. If partner A 

 borrows money in the name of the firm but uses it for his 

 own interests, the lender may recover from the other part- 

 ner, "B." 



Partnership matters cause a great amount of business- 

 for lawyers. This is largely due to the fact that the art! 

 cles of copartnership are not drawn up properly in the 

 first place. Too many points are omitted or merely touch. -d 

 without proper elucidation. Some points that ought to lie 

 included in the partnership written agreement, in order to 

 avoid unpleasant arguments later, are given below. 



1. Specify what each is to contribute in value, naming 

 specific articles of equipment, livestock, etc. 



2. Duties of each whether all time is to be spent in 

 farming operations whether one is to have full powers 

 in handling swine or beef cattle while another one has 



