Default Partnership Rules Apply Without Agreement

Steps:

• Identify that no agreement means default rules from the Partnership Act 1890 govern.
• Review Act provisions: interest on partner loans to the firm is 5% per annum, but not on capital or drawings.
• Check profit sharing: equal shares, no salaries unless specified.
• Confirm no automatic interest or salaries tied to capital contributions.

Why A is correct:

• Partnership Act 1890, Section 24(3) mandates 5% interest per annum on loans or advances by partners to the partnership, treating them as debts.

Why the others are wrong:

• B: No default interest on drawings; this requires explicit agreement.
• C: No interest on capital; only on loans, per Section 24(3).
• D: No salaries; profits shared equally, regardless of capital, per Section 24(1).

Final answer: A