How are profits and losses typically distributed among partners?

Profits and losses in a partnership are typically distributed according to the terms outlined in the partnership agreement. If the partnership agreement does not specify a particular method of distribution, the default rule is that profits and losses are shared equally among all partners. This default rule ensures that all partners have a fair stake in the outcomes of the business, encouraging a collaborative environment.

In the absence of any specific agreement about how profits and losses should be divided, equal distribution serves as a fundamental principle in partnership law. Hence, option C correctly captures the standard practice: profits and losses are allocated based either on the partnership agreement or, if there is none, equally among the partners. This understanding is consistent with the typical legal framework governing partnerships, promoting fairness and equity among partners.