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Question
According to which section of the Indian Partnership Act, 1932 states that the outgoing partner has an option to receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money (i.e., based on capital ratio)?
Options
Section 37
Section 38
Section 39
Section 36
Solution
Section 37
Explanation:
In the absence of a written agreement, Section 37 of the Indian Partnership Act, 1932 applies, which provides that the outgoing partner has the option of receiving either interest at 6% per year until the date of payment or a portion of profits produced with his or her money (i.e., based on capital ratio). As a result, the complete sum owing to the retiring partner, as determined after all adjustments, must be given to the retiring partner immediately.
