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Choose the correct statement if a partnership deed is not present.

Solution

✅ Correct Option: 4

When a partnership deed is absent or silent on certain matters, the provisions of the Indian Partnership Act, 1932 apply automatically.

According to Section 13 of the Act, in the absence of a partnership deed:

Interest on Capital → Not allowed (No interest shall be paid on capital contributed by partners)

Interest on Drawings → Not charged (Partners can withdraw money without any interest being charged)

Salary/Remuneration to Partners → Not allowed (Partners cannot claim any salary or commission for their work)

Profit and Loss Sharing Ratio → Equal sharing (All partners share profits and losses in equal proportion, regardless of their capital contribution)


In this question, only Option 4 is correct because the Act specifically provides that partners shall share profits and losses equally when there is no agreement to the contrary.

For example: If there are 3 partners A, B, and C with capital contributions of ₹50,000, ₹30,000, and ₹20,000 respectively, and no partnership deed exists, they will still share profits equally in the ratio 1:1:1 (not in their capital ratio of 5:3:2).

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