"Partnership deed"
is normally just another name for a partnership agreement that exists in
writing. This is significant as it is possible for a partnership agreement to
be formed entirely through oral agreement or through actions. For example, if
different parties act as if they are in a partnership, then they may be legally
considered to be in a partnership. A partnership deed would define all the
terms of the partnership in writing, however, thus ensuring that the nature of
the partnership is clear for all involved.
Definition
Partnership deed
A partnership deed, also
known as a partnership agreement, is a document that outlines in details rights
and responsibilities of all parties to a business operation. It has the force
of law and is designed to guide the partners in the conduct of the business. It
is helpful in preventing disputes and disagreements over the role of each
partner in the business and the benefits which are due to them.
Contents
1.
Names and addresses of
the firm and each partners
2.
Nature of business to be carried on
and the locally where business is to set up
3.
Duration of
partnership, whether for a fixed period/job of not
4.
Capital contribution
by the each partner
5.
Profit sharing ratio
among the partners
6.
Interest on capital,
if any to be paid to partners
7.
Drawings and interest
on drawings, whether permissible or not
8.
Loans and advances by
partners to the firm
9. Whether or not to pay
salary or commission to partners How and who will manage the business
10. Methods of keeping
account who and how to audit the accounts. Maintaining bank accounts
11.
The mode of admission
and retirement of partners
12.
How to value the
goodwill on admission, retirement and death of a partner
13.
Method of settlement
of accounts on retirement and death of a partner
14.
Provision for
arbitration in case of disputes
15.
The methods of
dissolution of partnership firm
16.
Settlement of accounts
in case of dissolution of the firm