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Question
Consider the following statements
Statement 1: "No interest is to be charged on the drawings made by the partners if there is no mention in the Deed."
Statement 2: Specified provisions are required to be mentioned in the partnership deed to charge interest on drawings.
Options
Only statement 1 is correct.
Only statement 2 is correct.
Both the statement is correct.
None of these
MCQ
Solution
Both the statement is correct.
Explanation:
If the partners' drawings are not mentioned in the Deed, no interest is to be levied. To charge interest on drawings, specific provisions must be included in the partnership document.
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Distribution of Profit Among Partners
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