1. Mr.Ashok and Mr. Babu were two sole proprietors' doing similar business They were competing each other and in order to attract customers towards them, they indulged themselves in reducing price of their commodity. Consequently, their profit margin reduced and gradually were facing loss. One fine day they met each other and decided to do the business jointly as a partnership firm with the intention of avoiding competition and earn more profit The smooth and successful running of a partnership firm requires a clear understanding among its partners regarding the various policies governing their partnership. The partnership deed (agreement in writing) serves this purpose. The partnership deed brings clarity to the partners with regard to profit/loss sharing, salary, interest on capital, drawings, admission of a new partner, etc. Though issuing a partnership deed is not mandatory, they both felt it is better to enter into a partnership deed to avoid any possible disputes and litigation among them in future. Hence, they approached an Auditor to draft a partnership deed for them. Assuming you are an Auditor, draft a partnership deed for their partnership firm.
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Answer:
The Venturi effect is the reduction in fluid pressure that results when a fluid flows through a constricted section of a pipe. The Venturi effect is named after its discoverer, the 18th century Italian physicist, Giovanni Battista Venturi.
Partnership Deed can be oral or written. It is not compulsory to make the Partnership Deed by a company but it is advised to make the deed.
Explanation:
THE PARTNERSHIP DEED OF ASHOK SHARMA AND BABU MISHRA
This Partnership Deed is formed on 27th day of January, 2022 by and amongst:- 1. Mr. Ashok Sharma S/o Ravi Sharma R/o V-90, Tilak Nagar, New Delhi-110018 (henceforth, known to be as party of the first part); AND 2. Mr. Babu Mishra S/o Anil Mishra R/o 3A, Rajouri Garden, New Delhi-110018 (henceforth, known to be as party of the second part). WHEREAS the parties above named intend to carry on the business in partnership in the name and style of M/s. AB Footwear vide this Deed of Partnership. AND WHEREAS all the parties mentioned above hereby wishes that the terms and conditions be decreased in writing to do away any avoidable disputes and misunderstanding that may arise in future.
NOW, THEREFORE THIS PARTNERSHIP DEED WITNESS AS THE UNDER:-
1. That the partnership business shall be move on under the name and style of M/s. AB Footwear.
2. That the business of the partnership firm will be selling Footwear of women or any other business as may be chose from time to time mutually by all the partners to this Deed.
3. That Head Office of the partnership firm will be at Pitampura, New Delhi. The Head Place of business may be moved to some other place or places as the partners may unanimously decide from time to time.
4. That any branch may be started under any name and style at such place or places as the partners may choose from time to time.
5. That the agreements of the partnership shall be deemed to have been commenced with effect from the 1st day of February, 2022.
6. That the capital essential for the partnership shall be taken to the company by the partners as mutually agreed upon amongst the partners.
7. That the all books of accounts of the partnership shall be made at the business place which shall be closed on 31st day of March each year and each partner shall have the power to have Xerox copies of the same.
8. That at the end of each financial year, the firm’s accounts shall be made and the Profit & Loss Account and the Balance Sheet of the firm will be made and the Profit and/or losses coming to the share of each partner shall be credited or debited to the respective accounts.
9. That the Profit and Loss Account and the Balance Sheet shall be duly signed by any two partners and upon signing the same shall be binding and final.
10. That the Profits and Losses as per Profit and Loss Account of the partnership business shall be divided amongst the partners as under. 1. 50%(Party of the First part) 2. 50% (Party of the Second part) .
11. That the bank account(s) of the partnership shall be handled by any of the partner to this deed or as may be mutually decided time to time.
12. No partner, without the written consent of the all the other partners shall do or support in doing any of the following acts:- (i) Sell, assign, mortgage, or otherwise give his share or interest in the partnership business. (ii) Charge, mortgage, assign or otherwise transfer the business, property or rights of this partnership firm.
13. That the partnership is “AT WILL" and can be closed at any time when the partners are agreed upon it.
14. That all the parties to this deed shall work truthfully and faithfully to the usual advantages of the firm and shall render true and correct details to each other.
15. That any dispute which may come between the partners or their legal heirs, successors or representatives with relation to the construction, meaning and effect to this deed and/or any part thereof or in respect of the accounts, profits or losses of the business of the said firm or any other matter relating to the firm shall be come under the Indian Arbitration Act, 1940.
16. The powers and duties of the Partners, which shall be made at their sole discretion with mutual consent (written/verbal) from partners, shall incorporate but not be restricted to the below: – To convert this partnership Firm in LLP or Pvt. Ltd. or Ltd. Company as and when Partner wants to do so.
17. A simple interest on Capital @ 10% p.a. shall be payable by the firm to the parties.
18. That any partner can draw salary, remuneration and/or commission for working in the partnership firm as mutually agreed upon between the partners.
19. That the books of accounts and other papers of the firm shall be remain at the place of business only and shall at all rational times, be open for checking by any of the parties or his authorized agent.
20. The rules of the Indian Partnership Act, 1932 shall bind on the Partners.
IN WITNESS OF the parties hereto have set and signed on the day, month and year first mentioned above.
WITNESSES : 1. Ram Grewal R/o 39C, Vikaspuri, New Delhi-110018 (Party of the First part) 2. Gaurav Sarna R/o House No.100, Tagore Garden, New Delhi-11018(Party of the Second Part).