Partnership act

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pranita pansare (Querist)

21 February 2009 we hav started a new business as partnership ,
two partners are there fixed Capital 25000 per head.
other than this they paid 500000 per head to start a business .

This 500000 should i consider as current a/c or loan a/c

if the same i will consider as loan then how much percent interest on loan i have to pay

please advice me accounting treatment for the same

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

21 February 2009 If there is a specific clause in the Partnership Deed that partners are permitted to bring in money as loan, then Rs 5,00,000/- brought in can be considered as loan.

Interest can be given if the partners so wish,on the strength of resolution, at a rate not more than the bank rate.

pranita pansare

pranita pansare (Querist)

21 February 2009 in partnership deed such clause is not there about the loan

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

21 February 2009 Either amend the deed ,if the partners so wish, or treat it as amount brought in to the C/A.

pranita pansare

pranita pansare (Querist)

21 February 2009 If it is mentioned in partnership deed that
simple intrest at the rate of 12% pa or such lower/higher as may be prescribed u/s 40 (b) (vi) of the income tax act, 1961 shall be payable by the firms on the amount standing to the credit of the capital and/or current a/c or loans of the partners a/c.

please explian me this& accounting treatment for the same

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