PARTNERSHIP DEED
The document containing the partnership agreement among partners is called Partnership Deed. It contains the terms and conditions which are agreed upon by all the partners. An agreement may be written or oral but when it's written, it's called a deed.
The Partnership Act doesn't make it compulsory to have a written agreement. However, in case of dispute among the partners, it is always in the best course to have a written agreement duly signed (by all the respective partners) and registered under the Act. Partnership Deed contains the rules and regulation framed for the internal Management of the firm. It is also an Article of Partnership.
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Contents of the Partnership Deed
1) Name and address of the firm and its main business.
2) Name and address of all partners and duration of the partnership.
3) Capital contribution of all the partners
4) Ratio in which profits (and losses) are to be shared.
5) Rights, duties and liabilities of the partners.
6) Provisions related to admission, retirement,death etc. of a partner.
7) Rate of interest on capital, loan, drawings etc.
8) Salaries, commission, etc. if payable to any partners.
9) Settlement of accounts on dissolution of the firm.
10) Method of settlement of disputes among the partners.
11) Any other matter relating to the conduct of business.
Importance of Partnership Deed
Partnership Deed
Partnership deed is a very important document because it is the written agreement which contains all the terms and conditions of the partnership business. It forms the basis of mutual relationship among the partners. Moreover, partnership deeds regulate the rights, duties and liabilities of all the partners as well as of the firm. So by having partnership deed partners disputes in future may be avoided.
Hence it is always in favour, to have a written agreement i.e. partnership deed duly signed by all the partners and registered under the Indian Partnership Act 1932.
