interest on partners’ loan

RATE OF INTEREST ON PARTNERS LOAN TO THE FIRM: Partners are entitled to receive interest at an agreed rate of interest on any Loan given by them to the firm. Interest on Loan is a charge against profits so a partner is entitled to receive interest wheather there are profits or not. If there is no agreement regarding the rate of interest, it is taken as 6% p.a.

when partnership deed is absent

RULES APPLICABLE IN THE ABSENCE OF PARTNERSHIP DEED As we know from the previous discusion that it is not cumpulsory to have a partnership deed for a partnership firm. Hence if a firm is not having any written agreement or a partnership deed or if partnership deed is there but it is silent on certain issues the following provisions of the Indian Partnership Act 1932 will be applicable. 1. Profit sharing Ratio : Profits and losses would be shared equally among partners. 2. Interest on capital : No interest on…