Question

If the Partnership Deed does not specify the rate of interest payable on capital, is the interest still payable? If yes, at what rate? If not, why?

Answer 1

Partnership Deed is the legal document signed by all the partners and contains all the terms and conditions under which the partnership is formed. If there is no partnership deed or the partnership deed is silent on some provisions, then there are some benefits to which partners are not entitled to.

So, if the partnership deed does not specify the rate of interest but there is provision regarding the interest payment on capital, then interest can be paid @ 6% and it is payable only if there is profit.