Tuesday, March 20, 2012

RULES APPLICABLE IN THE ABSENCE OF PARTNERSHIP DEED


 We know  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 capital would be allowed to partners. If tehre is an agreement to allow interest on capital it is to be allowed only in case of profits.
3. Interest on drawings: No interest on drawings would be charged from partners.
4. Salary:   No salary or commission is to be allowed to partners.
5. Interest on Loan : If apartner has provided any Loan to the firm, he would be paid Interest at the rate 6% p.a. This interest on laon is a charge against profits i.e. it is to be allowed even if there are losses to the firm.

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