Discuss the main provisions of the Indian Partnership Act, 1932 that are relevant to partnership accounts if there is no partnership deed.
Discuss the main provisions of the Indian Partnership Act, 1932 that are relevant to partnership accounts if there is no partnership deed.
Thefollowing are the main provisions of the Indian partnership Act, 1932that are relevant to the partnership accounts in absence ofpartnership deed.
1.Profit Sharing Ratio: If the partnershipdeed is silent on sharing of profit or losses among the partners of afirm, then according to the Partnership Act of 1932, profits andlosses are to be shared equally by all the partners of the firm.
2.Interest on Capital: If the partnership deedis silent on interest on partner’s capital, then according tothe Partnership Act of 1932, no interest on capital should begiven to the partners of the firm. However, interest on capital isgiven only out of the profits, if mutually agreed by all thepartners.
3.Interest on Drawings: If the partnershipdeed is silent on interest on partner’s drawings, thenaccording to the Partnership Act of 1932, no interest ondrawing should be charged from the partners of the firm for theamount of capital withdrawn in the form of drawings.
4.Interest on Partner’s Loan: If thepartnership deed is silent on interest on partner’s loan, thenaccording to the Partnership Act of 1932, the partners are entitledfor 6% p.a. interest on the loan forwarded by them to the firm.
5.Salary to Partner: If the partnership deedis silent on salary to a partner, then according to the PartnershipAct of 1932, no salary should be given to any partner.
Thefollowing are the main provisions of the Indian partnership Act, 1932that are relevant to the partnership accounts in absence ofpartnership deed.
1.Profit Sharing Ratio: If the partnershipdeed is silent on sharing of profit or losses among the partners of afirm, then according to the Partnership Act of 1932, profits andlosses are to be shared equally by all the partners of the firm.
2.Interest on Capital: If the partnership deedis silent on interest on partner’s capital, then according tothe Partnership Act of 1932, no interest on capital should begiven to the partners of the firm. However, interest on capital isgiven only out of the profits, if mutually agreed by all thepartners.
3.Interest on Drawings: If the partnershipdeed is silent on interest on partner’s drawings, thenaccording to the Partnership Act of 1932, no interest ondrawing should be charged from the partners of the firm for theamount of capital withdrawn in the form of drawings.
4.Interest on Partner’s Loan: If thepartnership deed is silent on interest on partner’s loan, thenaccording to the Partnership Act of 1932, the partners are entitledfor 6% p.a. interest on the loan forwarded by them to the firm.
5.Salary to Partner: If the partnership deedis silent on salary to a partner, then according to the PartnershipAct of 1932, no salary should be given to any partner.
