Whenever an entrance is permitted to new partner it ultimately provides a right to the newcomer to share the profits of the firm in the future. Because of the share given to the newly admitted partner the old profit sharing ratio of the firm definitely changed. The ascertainment of new profit sharing ratio will depend on the agreement between the old partners and the new partner. The new partner may get her/his share of future profit either from one partner or from all the partners. In effect the combined shares of old partners will be reduced.
The following are the cases which may arise while calculating new profit sharing ratio:
1. When the share of the new partner is, simply given and nothing is stated about the sacrifice of the old partners.
2. When the new partner purchases the share from old partners in their old profit sharing ratio
3.When the new partner acquires the share in some agreed or sacrificed proportioned from the old partners
4. When the new partner buys the share equally from old partners
5. When the new partner purchases the share as a whole from one of the old partners
6. When all the partners including the new one decide to share future profit/loss in completely new ratio
The aforesaid cases are of relating to the admission of new partner. But, even if, admission, retirement or death, nothing happens, the disagreement between the old partners due to some other causes may take place and they may decide to their future profit sharing ratio. Some of the cases may occur are as follows:
i. One of the old/existing partner acquires the share in some agreed proportion from one or all other partners.
ii. All the existing partners decide to share future profit totally in new ratio
iii. All the existing partners decide to change one or more than one's share in future
