Question

In the case of retirement, if full or part of the amount payable to the retiring partner still remains to be paid, and there is no agreement among the partners then the retiring partner will get:

(i) Interest @6% p.a. on the Balance amount.

(ii) Share of profit earned proportionate to his amount outstanding to the total capital of the firm.

(iii) Interest @9% p.a. on the balance amount.

Which out of the following is correct?

Options

• (i)

• (ii)

• (iii)

• Have a choice to get either (i) or (ii)

Answer 1

Have a choice to get either (i) or (ii)

Explanation:

According to Section 37 of the Partnership Act of 1932, in this instance, he has two options:

(i) interest on his balance at 6% per year, or

(ii) his share of profit.