This question was previously asked in
Shift 11/06/2023 3:30 PM - 6:30 PM
Correct Answer
In the absence of a partnership deed, the partnership is governed by the provisions of the Indian Partnership Act, 1932. Based on the default rules of the Act, here's what would be correct:
(A) Profit sharing ratio will be on the basis of capital contributed by the partners - This is incorrect. In the absence of a partnership deed specifying the profit-sharing ratio, profits and losses are shared equally among the partners.
(B) No interest on capital will be provided - This is generally correct. In the absence of a partnership deed specifying an interest rate on capital, partners usually do not receive interest on their capital.
(C) No interest on Drawing will be charged - This is generally correct. In the absence of a partnership deed specifying an interest rate on drawings, partners typically do not pay interest on their drawings.
(D) 6% p.a. interest on a partner's loan will be provided - This is not correct by default. In the absence of a partnership deed specifying an interest rate on partner's loans, the Partnership Act does not mandate a specific interest rate.
(E) Partner will not get a salary for extra time devoted to the firm - This is not correct by default.
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