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 problems:
$C$ wants that the loan given by him to the firm should bear interest $@10\%p.a$. but $A$ and $B$ do not agree.
State how you will settle these disputes if the partners approach you for the purpose.

Answer 1

In the given situation, C's claim is wrong.

When there is no partnership deed, a partner is still entitled to interest on any amount advanced by him in excess of his capital contribution. The rate of interest on loan should be 6%p.a not more than that and it should still be paid in case of loss in any year.

C should be paid interest on loan but not @10%p.a. He should be paid interest @6%p.a.