Question

What are the rules applicable in the absence of Partnership deed?

Answer 1

Dear Student

In the absence of a partnership deed or verbal agreement or if partnership deed is silent on a certain point, following provisions of Indian Partnership Act, 1932 will be applicable :

• Profit Sharing Ratio; Profit and losses will be shared equally among partners.
• Interest on Capital: No interest on capitals shall be allowed to the partners.
• Interest on Drawings: No interest is to be charged on Drawings
• Salary to a partner: No partner is entitled to any salary or commission.
• Interest on Loan: Interest at the rate of 6% per annum is to be allowed on partner's loan to the firm.
• Admission of a new partner: Without the consent of all existing partners, no new partner can be admitted.

Regards