Question

X and Y are partners in a firm. They do not have any partnership deed. What should be done in the following cases:

1. X has invested ₹ 10,00,000 and Y only ₹ 5,00,000 as capital. X wants interest on capital @ 8% p.a.
2. X spends twice the time that Y devotes to the business. He wants a salary of ₹ 10,000 per month for the extra time spent by him.
3. X wants to introduce his son Rajesh into the business for a 25% share to be given out of his share of profits. Y objects to it.
4. X has advanced a loan of ₹ 2,00,000 to the firm. He claims interest @ 9% p.a.
5. Y withdraws ₹ 10,000 per month from the firm for his personal use. X claims that interest on drawings @ 12% p.a. be charged from Y.

Answer 1

1. No interest on capital will be allowed.
2. X is not entitled to any salary.
3. X’s son Rajesh cannot be admitted as a partner if Y objects to it.
4. X is entitled to claim interest on his loan @ 6% p.a.
5. Interest cannot be charged on drawings.