In the absence of partnership deed, which of the following statement is correct?
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This question was previously asked in
Shift 30/05/2023 8:30 AM - 10:30 AM
A
Interest on partners' Capital will be allowed @ 6% p.a.
B
Interest on partners' Loan is to be given @ 6% p.a.
C
Profits are shared in the ratio of Capital
D
Interest on Drawing is to be charged @ 6% p.a.
Correct Answer
Interest on partners' Loan is to be given @ 6% p.a.
Detailed Explanation
In the absence of a specific agreement, the Act provides for the payment of interest on partners' loans at a rate of 6% per annum. This is the default provision when there is no explicit provision in the partnership deed regarding the rate of interest on partners' loans.
So, the correct statement is:
(2) Interest on partners' Loan is to be given @ 6% p.a.
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