Accounting rules applicable in the absence of Partnership deed :
Normally, a partnership deed covers all matters relating to mutual relationship among the partners. But, in the absence of agreement, the following provisions of the Indian Partnership Act, 1932 shall apply for accounting purposes.
1. Interest on Capital : No interest is allowed on Capitals of the Partners. If as per the partnership deed, interest is allowed, it will be paid only when there is profit. If loss, no interest will be paid.
2. Interest on Drawings : No interest will be charged on drawings made by the partners.
3. Salary/ Commission to partner : No partner is entitled to salary/ commission from the firm, unless the partnership deed provides for it.
4. Interest on loan : If any partner, apart from his share capital, advances money to the firm as loan, he is entitled to interest on such amount at the rate of six percent per annum.
5. Profit sharing ratio : The partners shall share the profits of the firm equally irrespective of their capital contribution.