Question

In the absence of a Partnership Deed, interest on a loan of a partner is allowed ______

Options

• at 8% per annum

• at 6% per annum

• at 12% per annum

• no interest is allowed.

Answer 1

In the absence of a Partnership Deed, interest on a loan of a partner is allowed at 6% per annum.

Explanation:

In the absence of a partnership deed, the interest rate on the loan is set at 6% p.a. under the Partnership Act of 1932.