Which combination of statements are false about partnership-
(A) Interest on partner's loan is to be given @ 12% p.a., if the deed is silent about the rate.
(B) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner.
(C) Methods of settlement of dispute among the partners can't be part of the partnership deed.
(D) Each partner carrying on the business is the principal as well as the agent for all the other partners
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B) and (C) only
(A) Interest on partner's loan is to be given @ 12% p.a., if the deed is silent about the rate. False. If the partnership deed is silent, the interest on a partner's loan to the firm is legally allowed at 6% p.a., not 12% p.a.
(B) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner. False. If the partnership deed is silent, no interest is charged on the drawings made by the partners.
(C) Methods of settlement of dispute among the partners can't be part of the partnership deed. False. The Partnership Deed is a legal agreement and can (and usually does) include clauses detailing methods for dispute settlement, such as arbitration.
(D) Each partner carrying on the business is the principal as well as the agent for all the other partners. True.