Question

$A,B$ and $C$ are partners in a firm. They do not have a Partnership Deed. At the end of the first year of the commencement of the firm, they have faced the following problem:
$A$ wants that interest on capital should be allowed to the partners but $B$ and $C$ do not agree.
State how you will settle these disputes if the partners approach you for the purpose.

Answer 1

B and C are correct.

When there is no partnership deed,the partners are not entitled to any Interest on the capital contributed by them. If at all there is a provision regarding interest on capital,it should be paid only in case of profit.

So, A contention is invalid regarding interest on capital to be allowed to partners in absence of partnership deed.