Question

In the absence of Partnership Deed ______.

Options

• Interest will not be charged on partner's drawings

• Interest will be charged @ 5% p.a. on partner's drawings

• Interest will be charged @ 6% p.a. on partner's drawings

• Interest will be charged @ 12% p.a. on partner's drawings

Answer 1

In the absence of Partnership Deed interest will not be charged on partner's drawings.

Explanation:

According to the default provisions of the Indian Partnership Act, 1932, if there is no Partnership Deed, no interest is charged on a partner's drawings unless the partners have specifically agreed to do so.