State the meaning of Guarantee of minimum profit.

Guarantee of minimum profit means assurance to give a minimum amount of profit to a partner or partners. The guarantee may be given by one or some or all of the partners in the existing profit-sharing ratio or in an agreed ratio. If in any year, the actual share of profit of a guaranteed partner is less than the guaranteed amount. then the deficiency (i.e., excess of the guaranteed amount over an actual share of profit) is borne by the guaranteeing partners in their agreed ratio.