In the absence of a partnership deed which of the following are correct.(A) Profit sharing ratio will be on the basis of capital contributed by the partners(B) No interest on capital will be provided(C) No interest on Drawing will be charged(D) p.a. interest on partner's loan will be provided(E) Partner will get salary for extra time devoted for the firmChoose the correct answer from the options given below:
- A(A), (B) and (C) Only
- B(A), (D) and (E) Only
- C(D) and (E) Only
- D(B), (C) and (D) Only
Solution & Step-by-step Explanation
Provisions under the Indian Partnership Act, 1932 in the absence of a partnership deed:Profits and losses must be shared equally, irrespective of capital contribution (makes A false).No interest on capital is allowed (B is correct).No interest on drawings is charged (C is correct).Interest on a partner's loan to the firm is provided at p.a. (D is correct).No salary or remuneration is given to any partner (E is false).Hence, statements (B), (C), and (D) are correct.