Question

Mohan and Shyam are partners in a firm. State whether the claim is valid if the partnership agreement is silent in the following matters: 

(i) Mohan is an active partner. He wants a salary of Rs. 10,000 per year;

(ii) Shyam had advanced a loan to the firm. He claims interest @ 10% per annum;

(iii) Mohan has contributed Rs. 20,000 and Shyam Rs. 50,000 as capital. Mohan wants equal share in profits.

(iv) Shyam wants interest on capital to be credited @ 6% per annum.

Answer 1

(i) Invalid I In the absence of partnership agreement, no interest on capital, interest on drawings, salary, commission is to be allowed to partners

(ii)Invalid Interest on partners loan to be allowed @ 6% pa,

(iii)Valid Profit and losses are to be shared equally.

(iv)Invalid No interest on capital is to be allowed to partners.