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Partnership Law Act 2019

Relationship of partners to third persons and to each other - Relationship of partners to one another

47: Entitlement to interest

You could also call this:

"Partners can earn interest on extra money they put into the business"

You need to know about how partners in a partnership can get interest on money they put into the business. If you're a partner and you pay more money than you agreed to for the partnership, you can get 5% interest each year on that extra money. This interest starts from the day you pay the extra money.

However, you can't get interest on the money you agreed to put into the partnership at the start. You have to wait until the business figures out how much profit it has made before you can get any interest on your original investment.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206047.

Topics:
Business > Industry rules
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Part 3Relationship of partners to third persons and to each other
Relationship of partners to one another

47Entitlement to interest

  1. If a partner makes, for the purpose of the partnership, an actual payment or an advance that is more than the capital that the partner has agreed to provide, the partner is entitled to interest at the rate of 5% per year from the date of the payment or advance.

  2. A partner is not entitled, before the profits are ascertained, to interest on the capital provided by the partner.

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