Question

A and B are partners, but they do not have any partnership agreement. How will they solve the following disputes between them?

1. A wants that profits should be shared in the capital ratio.
2. B wants that he should be paid a salary for devoting more time for the business of the firm.

Answer 1

In the absence of a partnership agreement, the disputes will be settled as per the Indian Partnership Act, 1932.

1. Profits will be shared equally between A and B and not in the capital ratio.
2. No partner is entitled to any salary for services rendered. Hence, B will not be paid any salary for devoting more time to the business.