Question

If articles are silent regarding interest on calls in advances, the minimum rate of interest which can be allowed on calls-in-advance is ______________.

• A. 5% p.m.
• B. 6% p.a.
• C. 5% p.a.
• D. None of these

Answer 1

The correct option is B 6% p.a.

If the Articles of the Company are silent about the rate of interest on calls-in-advance, then rate of interest is 6% p.a. Such an interest is a charge on profits and has to be paid to the concerned shareholder even if there is no profit.