In the absence of a partnership deed, the act stipulates that____________
A An amount should be fixed as salaries for partners
B Profits and losses should not be shared equally
C Interest on partner’s loan should be 25%
D Interest should not be allowed on partners drawings
Answer is D
Partnership Act includes the following rules in the absence of an agreement among partners:
i. Profit or losses of the firm will be shared equally by the partners
ii. Interest on capital will not be allowed to any partner.
iii. No interest will be charged on drawings
iv. Interest on loan will be 6% on the loan
v. No salary or remuneration will be allowed to any of the partners
vi. Every partner must take part in the management of the partnership business
vii. The partnership books are kept at the place of business of the partnership and every partner may have access to and inspect and copy any of them.
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