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In the absence of an agreement, partners are entitled to
- a)Salary
- b)Commission
- c)Interest on Loan and Advances
- d)Profit share in capital ratio
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
In the absence of an agreement, partners are entitled toa)Salaryb)Comm...
Entitlements of Partners in the Absence of an Agreement
In the absence of an agreement, partners are entitled to certain benefits as per the provisions of the Partnership Act. These entitlements are as follows:
1. Interest on Loan and Advances
Partners are entitled to receive interest on any loan or advance made by them to the partnership firm. The rate of interest should be reasonable and not exceed the prevailing market rate.
2. Profit share in capital ratio
Partners are entitled to a share of profits in proportion to their capital contribution to the partnership firm. For example, if two partners contribute equal amounts of capital, they are entitled to an equal share of profits.
3. Salary
Partners are not entitled to a salary in the absence of an agreement. However, if a partner provides services to the partnership firm, they may be entitled to a reasonable remuneration for the same.
4. Commission
Partners are not entitled to a commission in the absence of an agreement. However, if a partner contributes to the business development of the partnership firm, they may be entitled to a commission for the same.
Conclusion
In conclusion, partners are entitled to interest on loan and advances, profit share in capital ratio, and reasonable remuneration or commission for services or business development in the absence of an agreement. It is important for partners to have a partnership deed in place to avoid any misunderstandings or disputes in the future.
In the absence of an agreement, partners are entitled to certain benefits as per the provisions of the Partnership Act. These entitlements are as follows:
1. Interest on Loan and Advances
Partners are entitled to receive interest on any loan or advance made by them to the partnership firm. The rate of interest should be reasonable and not exceed the prevailing market rate.
2. Profit share in capital ratio
Partners are entitled to a share of profits in proportion to their capital contribution to the partnership firm. For example, if two partners contribute equal amounts of capital, they are entitled to an equal share of profits.
3. Salary
Partners are not entitled to a salary in the absence of an agreement. However, if a partner provides services to the partnership firm, they may be entitled to a reasonable remuneration for the same.
4. Commission
Partners are not entitled to a commission in the absence of an agreement. However, if a partner contributes to the business development of the partnership firm, they may be entitled to a commission for the same.
Conclusion
In conclusion, partners are entitled to interest on loan and advances, profit share in capital ratio, and reasonable remuneration or commission for services or business development in the absence of an agreement. It is important for partners to have a partnership deed in place to avoid any misunderstandings or disputes in the future.
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In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer? for Class 12 2025 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Class 12 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer?.
In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer? for Class 12 2025 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Class 12 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for In the absence of an agreement, partners are entitled toa)Salaryb)Commissionc)Interest on Loan and Advancesd)Profit share in capital ratioCorrect answer is option 'C'. Can you explain this answer?.
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