Question 23 of 43
Q.Akash, Bala, Chandru and Daniel are partners in a firm. There is no partnership deed. How will you deal with the following ?
(i) Akash has contributed maximum capital. He demands interest on capital at 10% per annum.
(ii) Akash demands the profit to be shared in the capital ratio. But, others do not agree.
(iii) Loan advanced by Chandru to the firm is ₹ 50,000. He demands interest on loan @ 12% per annum.
Puducherry TnboardTamil Nadu HSC (DGE) Commerce Board 2022Subjective· 3mImportance★★★★★
53% · 23/43 Questions
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Start your 14-day free trial to unlock the full solution →With no deed, the Indian Partnership Act, 1932 governs: no interest on capital, profits shared equally, and interest on a partner's loan is 6% p.a. — so all three claims are settled by the Act, not by demand.
When a firm has no partnership deed, the relevant provisions of the Indian Partnership Act, 1932 apply automatically. Applying them to each point:
- Interest on capital @ 10% — not allowed. In the absence of a deed, no interest on capital is payable to any partner, however large his capital. So Akash's demand for 10% interest on capital is rejected.
- Profit in capital ratio — not allowed. In the absence of a deed, profits and losses are shared equally among all partners, irrespective of their capital contributions. Hence the other partners are correct — profit is shared equally, not in Akash's proposed capital ratio. …
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