Concept:When partners do not sign a partnership deed, the provisions of the Partnership Act govern their relationship.
Explanation:The Act assumes that partners intend to be fair and equal in the absence of a written agreement.
Profits and losses must be shared equally among the partners.
Partners are not entitled to salaries or any form of remuneration.
No interest is allowed on capital contributed by partners.
No interest is charged on partners' drawings.
Interest on a partner's loan is paid at the statutory rate, not an arbitrary
25%.
Option A is wrong because salaries are not fixed without a partnership deed.
Option B is wrong because the Act stipulates equal sharing of profits and losses.
Option C is wrong because the statutory interest on a partner's loan is not
25%.
Option D is correct because interest is not charged on partners' drawings when there is no partnership deed.
Answer:D. Interest should not be allowed on partners drawings.