Provision of the Indian Partnership act 1932:

Provision of the Indian Partnership act 1932:
At the time of formation of partnership firm, a document is prepared called as partnership deed and all terms and conditions are mentioned into the deed, but if the partnership deed is silent about any point then this issue is solved as per the provisions in Partnership Act 1932 section no 12 and 17 are made applicable to determine the following issues.
1)  Distribution of profit : If the partnership deed is silent about the profit sharing ratio, then the profit and losses are distributed among the partners is equal ratio.
2)  Interest on drawings : As per the provision of Indian Partnership Act 1932, if the date of drawing is not given then average of six month's interest is charged on drawings.
3)  Interest on partner's loan : If the partner provides additional amount to the business as loan, but rate of interest on loan is not given then 6% p.a. interest is allowed.
4)  Interest on capital : If the partnership deed is silent about interest on capital then interest is not allowed.
5)  Salary or commission to Partners : As per the provision made in the Indian Partnership Act 1932 no salary, commission, allowance or any remuneration is to be given to any of the partners for any extra work done for the firm, However, if any provision is made in partnership deed, then partners are entitled to get commission or salary as per the agree- ment.
6)  Admission of a new partner : As per the provisions of the Indian Partnership Act 1932, no outside person can be admitted into the firm as a partner without the consent of other partners.

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