Question

When final payment of retiring partner is out settled at the time of retirement, write right of partners under Section 37 of Indian Partnership Act, 1932.

Answer 1

According to Section 37 of Indian Partnership Act, 1932, if remaining partners continue to carry on the business without payment of final settlement amount to the retiring partner then there are two options available to the retiring partner, he is entitled

• get interest 6% per, annul on the outstanding amount till receipt of the final payment or,
• to get share in earned profit for that period in the ratio of capital, whichever is beneficial to him can be accepted by him.