Question

In the absence of specific provision in the partnership deed at what rate interest on advances given by the partners would be allowed _______ .

• A. 8% p.a.
• B. 10 % p.a.
• C. 6% p.a.
• D. Nil

Answer 1

The correct option is C 6% p.a.

In the absence of a specific provision in the partnership deed, a partner making, for the purposes of the business, any payment or advance beyond the amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of six per cent per annum.