Question

State the provisions of Partnership Act, 1932, in the absence of a Partnership Deed regarding (i) Interest on Partner's Drawings, and (ii) Interest on Advances other than capital.

Answer 1

In the absence of a Partnership Deed,

(i) Interest on Partner's drawings is not allowed.

(ii) If the partner advances any loan towards the firm, he is entitled to an interest of 6 percent even if the firm is incurring losses.