In this Article Explain the Partnership Deed, Best form of Partnership Deed and its Contents
Table of Contents
Partnership Deed and Its Contents
Definition:-
Partnership deed is a document, which contains all necessary rules and regulations required to run the partnership business.
- Partnership agreement may be oral.
- Partnership agreement may be written.
- Partnership agreement may be written and registered.
Best form of partnership deed:
The best form of partnership deed is that it must be written and registered and signed by the all partners.
Contents of a Partnership Deed
- Name of Firm:
Name of firm should be written in partnership agreement.
- Nature of Business:
Nature of the business should be mentioned in it.
- Duration:
Duration of partnership whether it is for definite or indefinite period should be mentioned.
- Capital:
The total capital of the firm and the share of each partner should be decided in the partnership deed.
- Profit & Loss Sharing Ratio:
Profit and loss sharing ratio of business should be agreed in partnership deed.
- Date:
Date of starting the business should be written in partnership agreement.
- Name of the Partners:
Name of the partners and their addresses should be described in the partnership agreement.
- Location:
Location of the business should be written in agreement.
- Salary:
It should be decided in the agreement whether salary would be paid or not to partners for their services rendered.
- Rights and Duties of Partners:
The provisions regarding the rights and duties of each partner are also written in the agreement.
- Entry and Exit of Partner:
Procedure to be followed for withdrawal or for the admission of new partner should be mentioned in the partnership deed.
- Ways of Dissolution:
The manners under, which the firm may be dissolved and procedure of dissolution should be decided.
- Loan and Interest:
Provisions regarding the amount of loan and interest hereon should be mentioned.
- Dealing with Bank:
The name of dealing bank and the names of authorized persons for the dealing are also written.
- Division of Work:
The division of work among the partners for management of firm should be finalized.
- Drawings:
The amount that each partner shall be allowed to withdraw in anticipation of profit and interest thereon.
- Death of Partner:
The partnership agreement should essentially contain the provisions that in case of death or insanity of any partner.
- Insolvency of Partner:
It is clarified in the partnership agreement that if any partner becomes insolvent, what will be the effects on partnership.