Question

A and B are partners in a partnership firm without any agreement. A has given a loan of ₹ 50,000 to the firm. At the end of the year, a loss was incurred in the business. Following interest may be paid to A by the firm:

Options

• @ 5% Per Annum

• @ 6% Per Annum

• @ 6% Per Month

• As there is a loss in the business, interest can’t be paid.

Answer 1

@ 6% Per Annum

Explanation:

In the absence of a partnership agreement, the provisions of the Indian Partnership Act, 1932, apply.

As per the Act, if a partner gives a loan to the firm and there is no agreement about interest, he is entitled to interest at the rate of 6% per annum, even if the firm incurs a loss.