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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?
Verified Answer
In the absence of an agreement, partners are entitled toa)Salaryb)Comm...
A partnership deed is a written legal document to avoid unnecessary misunderstanding, harassment and unpleasantness among the partners in the event of any dispute.
Partners can make or insert clauses in their partnership deed.
In case if partner does not make agreement or deed, then partners are entitled for interest on loans and advances and their profit sharing ratio will be equal. They are not entitled for salary and commission.
A partnership deed is a written legal document to avoid unnecessary misunderstanding, harassment and unpleasantness among the partners in the event of any dispute.
Partners can make or insert clauses in their partnership deed.
In case if partner does not make agreement or deed, then partners are entitled for interest on loans and advances and their profit sharing ratio will be equal. They are not entitled for salary and commission.
Most Upvoted Answer
In the absence of an agreement, partners are entitled toa)Salaryb)Comm...
Partnership Agreement and Partner's Entitlements
Partnership is an association between two or more persons who agree to carry on a business for profit. A partnership agreement is a legal document that outlines the terms and conditions of the partnership, including the rights and responsibilities of each partner.
In the absence of an agreement, partners are entitled to certain entitlements. Let's discuss these entitlements in detail below.
Interest on Loan and Advances
Partners are entitled to interest on the capital they have invested in the partnership and on any loans or advances they have made to the partnership. The rate of interest may be specified in the partnership agreement or may be determined by law.
Salary
Partners are not entitled to a salary. However, if the partnership agreement provides for a salary, partners are entitled to receive it. The partnership agreement may also specify the method of calculating the salary.
Commission
Partners are not entitled to a commission. However, if the partnership agreement provides for a commission, partners are entitled to receive it. The partnership agreement may also specify the method of calculating the commission.
Profit share in capital ratio
In the absence of an agreement, partners are entitled to share the profits and losses of the partnership in the capital ratio. This means that each partner's share of the profits and losses is determined by the proportion of their capital contribution to the partnership.
Conclusion
In the absence of a partnership agreement, partners are entitled to interest on their capital, and any loans or advances they have made to the partnership. They are not entitled to a salary or commission. The profits and losses of the partnership are shared in the capital ratio.
Partnership is an association between two or more persons who agree to carry on a business for profit. A partnership agreement is a legal document that outlines the terms and conditions of the partnership, including the rights and responsibilities of each partner.
In the absence of an agreement, partners are entitled to certain entitlements. Let's discuss these entitlements in detail below.
Interest on Loan and Advances
Partners are entitled to interest on the capital they have invested in the partnership and on any loans or advances they have made to the partnership. The rate of interest may be specified in the partnership agreement or may be determined by law.
Salary
Partners are not entitled to a salary. However, if the partnership agreement provides for a salary, partners are entitled to receive it. The partnership agreement may also specify the method of calculating the salary.
Commission
Partners are not entitled to a commission. However, if the partnership agreement provides for a commission, partners are entitled to receive it. The partnership agreement may also specify the method of calculating the commission.
Profit share in capital ratio
In the absence of an agreement, partners are entitled to share the profits and losses of the partnership in the capital ratio. This means that each partner's share of the profits and losses is determined by the proportion of their capital contribution to the partnership.
Conclusion
In the absence of a partnership agreement, partners are entitled to interest on their capital, and any loans or advances they have made to the partnership. They are not entitled to a salary or commission. The profits and losses of the partnership are shared in the capital ratio.
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In the absence of an agreement, partners are entitled toa)Salaryb)Comm...
In the absence of deed partners are not entitled to any salary or commission and profits are shared equally whereas partner will be entitled to 6%p.a interest on loan given by him to the firm in the absence of deed.
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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?
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