Question

In the absence of Partnership Deed, what are the rules relation to
(a) Salaries of partners,
(b) Interest on partners capitals
(c) Interest on partners loan
(d) Division of profit, and
(e) Interest on partners drawings

Answer 1

Answer:

e) interest on parents drawing

Answer 2

Answer:

In absence of Partnership deed, the rules relation to are option c and d.

(c) Interest on partners loan

(d) Division of profit

Explanation:

There are provisions of Partnership Act, 1932 which are applicable in case of absence of Partnership deed. According to this act:

a. Salaries are not given to the partners

b. Interests are not paid on the Partner’s capital

c. Interest on partner’s loan is allowed but the interest rate is 6% per annum.

d. Also, profit is to be distributed in equal ratio.  

e. Interest is also not paid on Partner’s drawings

Thus, Option C and D are correct.