How Capital is treated in partnership

Ravi Singh (1 Points)

21 January 2023  

Hello everyone, I hope you all are doing well!

I have a question to which I hope to get an appropriate answer.

If at the beginning of starting the business there were 2 partners A & B. A got the land(owned by his father) and B brought cash to invest from his family which was completely invested in the construction on the land. 

After 6 months business is not giving good response and always needs money to be infused due to which partners are getting uninterested in doing the business.

Note: no paper work has been done between A&B till date.

Now, the question arises if they plan to shut it down what should ideally happen to the early investment which B brought in. Will A be liable for anything in the end if business fails, and especially because the money(by B) has been invested on the land?

What will happen to the construction?

(Because the land will continue to be owned by A's father).