Partnership
Querist :
Anonymous
(Querist) 12 November 2010
This query is : Resolved
A Deed of Partnership states that interest shall be paid on amounts brought in by Partners by way of Capital,Loan,Advance or Deposit.But no interest shall be paid to Parners in the event of a Loss to the Partnership Firm.
Does it cover Partners Capital Only or is applicable to Loans,Advances and Deposits given by Partners?
Can the Deed be amended to enable payment of Interest in the event of a Loss without contravening any provision of any law?
Sathyan A.R.
(Expert) 12 November 2010
if the profit of the firm before paying interest is positive the interest can be paid, otherwise not. Capital,advance, deposit loan are different ca-notations.
you cannot amend the deed to provide for interest in the even of loss before considering the income.
Querist :
Anonymous
(Querist) 12 November 2010
In other words,treatment of Capital,Loan,Advance or Deposit is similar.Further,the Deed cannot be ammended o pay interest if the Firm incurs a loss prior to interest.
Pls confirm.
