Consider the following statements, when the partnership deed is silent, about provision related to distribution of profits and select the correct statements.
(A) No extra monetary benefits to the working partners
(B) Profit sharing ratio is equal
(C) No extra monetary benefits to the partners bringing more capital as compared to other partners
(D) When profit is inadequate, the profit is distributed in the capital ratio
(E) Interest on loan granted by the firm to the partner will be charged @ 6% per annum
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (B) and (C) only
When the partnership deed is silent, the Indian Partnership Act, 1932 applies: profits are shared equally, and no salary, commission or interest on capital is allowed.
(A) No extra monetary benefits to the working partners — True. No partner gets salary or remuneration for working in the firm unless the deed provides for it.
(B) Profit sharing ratio is equal — True. Profits and losses are shared equally.
(C) No extra monetary benefits to the partners bringing more capital as compared to other partners — True. No interest on capital is allowed, so a larger capital earns nothing extra.
(D) When profit is inadequate, the profit is distributed in the capital ratio — False. Profits are shared equally irrespective of capital contribution, whatever their amount.
(E) Interest on loan granted by the firm to the partner will be charged @ 6% per annum — False. The 6% rule is for a loan advanced by a partner to the firm, on which the partner receives interest.
NCERT (2026-27 edition):
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