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CA Foundation · Business Laws · The Indian Partnership Act, 1932

Asha and Bilal are partners in a firm. Their deed does not mention remuneration for working partners. Asha alone looks after the business every day, while Bilal is a sleeping partner. Asha demands a monthly salary of Rs 20,000 from the firm. Under the Indian Partnership Act, 1932, what is the position?

Asha cannot claim a salary. Under the Partnership Act, a partner gets no remuneration for working in the business unless the partnership agreement expressly provides for it. Since the deed is silent, her greater involvement gives no right to salary.

  1. AAsha is entitled to the salary because she works more than Bilal
  2. BAsha is not entitled to any salary, as no remuneration is payable unless the contract provides for itCorrect
  3. CAsha is entitled to a salary fixed by the Registrar of Firms
  4. DAsha is entitled to a salary only if Bilal consents afterwards

Explanation

Under the Act, a partner is not entitled to remuneration for taking part in the conduct of the business unless the partnership contract says so. The deed is silent, so Asha's greater effort does not create any right to salary. Option A is wrong because unequal work does not change the default rule.

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