Interest Free Loan to Partners

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Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2010
Whether Interest free loan can be given to partners by a partnership firm?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 September 2010 It interest is paid on capital then interest should be recovered also

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2010 Interest is not being paid on partners capital, since it is a debit balance and further partners have withdrwan more money which is shown as loan..

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 September 2010 Not paid in this year but must have been paid in earlier years or may be paying to other partners. So u have to recover also.

Also this also depends upon the terms mentioned in the deed for charging interest.

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2010 it is the requirement of law??
or reference of any case law..??

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 September 2010 First check the terms in the deed and then revert.

Querist : Anonymous

Querist : Anonymous (Querist)

26 September 2010 Nothing is mentioned in Partnership deed in case of loan taken by a partners..

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 September 2010 If account is credit balance whether interest payable to partners? If yes then same would apply to debit also.