Choose the correct statement if a partnership deed does not exist.

Partners shall share the profit and losses equally

The correct answer is option 4- Partners shall share the profit and losses equally.

Partners shall share the profit and losses equally is the correct statement if a partnership deed does not exist.

Profit Sharing Ratio: In the absence of a specified profit sharing ratio in the partnership deed, the profits and losses of the firm will be divided equally among the partners, regardless of their individual capital contributions.

OTHER OPTIONS

• Interest on Capital are allowed-  IT IS FALSE as no interest on capital is provided. Unless explicitly stated in the partnership agreement, partners do not have the right to claim interest on the capital they have invested in the firm.

• Interest on partner drawing is charged-  IT IS FALSE as no interest on partner drawing is charged.  If the partnership deed does not mention anything about charging interest on drawings made by partners, no interest will be levied on such withdrawals. 

• Remuneration or salary is given to partners-  IT IS FALSE as no Remuneration or salary is given to partners. No partner is entitled to get salary or other remuneration for taking part in the conduct of the business of the firm unless there is a provision for the same in the Partnership Deed.