Question

What rate of interest is allowed on partners loan in the absence of an agreement

Answer 1

Answer:

6 percent

In the absence of any agreement interest on advances by a partner is allowed at 6 percent p.a. and is allowed whether there is profit or no. Interest on loan is a charge and will be provided regardless of profits earned In the absence of agreement the partners in the partnership firm are not entitled to any interest on capital or drawings but at they are entitled for getting interest on the loan given by them to be firm if if nothing is written in the agreement that is the agreement is silent then when according to Indian Partnership Act 1932 6% per annum interest rate will be be given to him the interest is generally simple interest not compound interest