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    Question

    According to the Partnership Act, what are the mutual rights and liabilities of partners in the absence of a contract between them?

    A Partners are entitled to receive remuneration for taking part in the conduct of the business Correct Answer Incorrect Answer
    B Partners are not entitled to any interest on the capital subscribed by them Correct Answer Incorrect Answer
    C Interest on the capital subscribed by a partner is payable only out of profits Correct Answer Incorrect Answer
    D All partners are entitled to receive equal remuneration for their contributions Correct Answer Incorrect Answer
    E All the above Correct Answer Incorrect Answer

    Solution

    Interest on the capital subscribed by a partner is payable only out of profits, Section 13 Mutual Rights and Liabilities:  Subject to contract between the partners - (a) a partner is not entitled to receive remuneration for taking part in the conduct of the business; (b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm; (c) where a partner is entitled to interest on the capital subscribed by him, such interest shall be payable only out of profits.

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