Ade, Bello, and Chidi established a general business partnership in Nigeria without executing a written Partnership Deed. Ade contributed ₦6,000,000 in capital, Bello contributed ₦4,000,000, and Chidi contributed no capital but managed daily operations. During the financial year, Ade advanced an additional personal loan of ₦500,000 to the firm. At year-end, the firm realized a net profit of ₦1,200,000. Under the statutory implied provisions of the Partnership Act, how must the loan interest and net profit be distributed?
- Ade receives 5% per annum interest on his loan advance, and the net profit is shared equally at ₦400,000 each among Ade, Bello, and Chidi.Cevap
- BThe net profit is shared in the capital contribution ratio of 6:4 between Ade and Bello, while Chidi receives a management salary and Ade receives no interest.
- CAde receives 10% commercial interest on his loan advance, and the remaining profit is divided 60% to Ade and 40% to Bello, excluding Chidi for lack of capital contribution.
- DAde receives 5% interest on his capital contribution of ₦6,000,000 first, and the remaining profit is shared equally between Ade, Bello, and Chidi.
Cevap
Ade is entitled to 5% interest per annum on his ₦500,000 loan advance, and the net profit of ₦1,200,000 must be shared equally (₦400,000 each) among all three partners.
When partners do not execute a Partnership Deed, section 24 of the Partnership Act outlines default rules: all partners are entitled to share equally in capital and profits, no partner is entitled to interest on capital before profit calculation, no partner is entitled to remuneration for acting in the business, and a partner making an advance beyond capital is entitled to interest at 5% per annum.
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Anahtar Kavram
Statutory Implied Provisions in the Absence of a Partnership Deed
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