CUET Preparation Today
The outgoing partner's account is settled as per the terms of partnership deed. However, in the absence of any agreement, Section 37 of the Indian Partnership Act, 1932 is applicable, which states that the outgoing partner has an option to:- |
Receive either interest @ 6.5% p.a. till the date of payment or such share of profits which has been earned with his/her money. Receive either interest @ 7% p.a. till the date of payment or such share of profits which has been earned with his/her money. Receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money. Receive either interest @ 7.5 % p.a. till the date of payment or such share of profits which has been earned with his/her money. |
Receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money. |
Correct answer: Option (3) → Receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money. Concept: Disposal of the amount due to a retiring/outgoing partner under Section 37 of the Indian Partnership Act, 1932, from Reconstitution of a Partnership Firm – Retirement/Death of a Partner. In the absence of an agreement, Section 37 gives the outgoing partner the option to receive EITHER interest @ 6% p.a. on the balance due till the date of payment, OR the share of profit earned with the help of his money (based on the capital ratio). The statutory rate is 6% p.a., so the 6.5%, 7% and 7.5% figures in the other options are wrong. Hence Option (3). |
