02 September 2010
There is no restriction on a partnership firm under the Partnership Act or any other law to give loan to the Partners unless specifically provided otherwise in the Deed of Partnership
03 September 2010
Mr. Deepak, When a firm can take advances & deposits from the partners and show it as liabilities, than it can also give it to partners say in the nature of loans. therefore in my opinion you can show it in the Assets side under the head Loans, Advances and Deposits, if partnership deed specifically mention such transaction.
04 September 2010
but in a case where the firm has borrowed money on interest and claiming the interest as business expenditure, there is a possibility that a proportionate portion may be disallowed
04 September 2010
partnership firm can give the loan to partners.But you have to keep in mind U/S 269SS/269T provision.If normal interest charged by the firm it can be credited to p&l account.
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