discuss the meaning and objective of partnership deed discuss the subject metter of partnership deed regarding genral metters
Answers
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Answer:
A partnership is a kind of business where a formal agreement between two or more people is made and agreed to be the co-owners, distribute responsibilities for running an organization and share the income or losses that the business generates. This features of partnerships are documented in a document which is known as partnership deeds.
What is a Partnership Deed?
A partnership deed also called as a partnership agreement, is a record that outlines in detail the rights and functionalities 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.
The Partnership comes into the limelight when:
There is an outcome of agreement among the partners.
The agreement can be either in written or oral form.
The Partnership Act does not demand that the agreement has to be in writing. Wherever it is in the form of writing, the document, which comprises terms of the agreement is called ‘Partnership Deed.’
It usually comprises the attributes about all the characteristics influencing the association between the partners counting the aim of trade, the contribution of capital by each of the partner, the ratio in which the gains and losses will be divided by the partners and privilege and entitlement of partners to interest on loan, interest on capital, etc.,
The sections of partnership deed can be modified with the accord of all the partners. The deed must be appropriately drafted and outlined as per the provisions of the ‘Stamp Act’ and ideally registered with the Registrar of Firms.
Few are the important advantages of the well-drafted deed:
It controls and monitors the rights, responsibilities, and liabilities of all the partners
Avoids dispute between the partners.
Avoids confusion on profit and loss distribution ratio among the partners.
Individual partner’s responsibilities are mentioned clearly.
Partnership deed also defines a remuneration or salary of the partners and working partners. However, interest is paid to each partner who has invested capital in the business.
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Concept: Objective of partnership deed and subject matter of partnership regarding general matters
Given: Hints
Find: The meaning of partnership deed and its subject matter
Solution: When two individuals agree to carry a business together and as per the terms and conditions, then they need to have legal proof of the agreement.
- This written document which contains all the agreed terms and conditions by the two business partners is called the "Partnership Deed".
- The Partnership deed is very helpful for any business because it is written proof about a deed or a promise that one business partner makes to another partner in terms of sharing profit and loss.
- A partnership deed is an agreement of terms and conditions between two business partners.
- A partnership deed is like a legal document.
- It is an agreement to carry the business.
- A partnership deed is like a contract.
Hence, we can now say that a partnership deed is a legal agreement between two business partners.
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