Multiple choice

In the absence of an agreement, partners are entitled to

  1. salary

  2. commission

  3. interest on loan and advances

  4. profit share in capital ration

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the Indian Partnership Act, in absence of agreement, partners are NOT entitled to salary or commission. They can only claim interest on loans and advances made to the firm (at 6% p.a.). Capital ratio determines profit share only if specified in agreement.