Question

Introduction partnership firm pdf

Answer 1

properly stamped. It should be comprehensive to avoid disputes later on. It is usual therefore, to
find the following clauses in a Partnership Deed which may or may not be registered.
1. Name of the firm and the partners;
2. Commencement and duration of business;
3. Amount of capital to be contributed by each partner;
4. Amount to be allowed to each partner as drawings and the timings of such drawings;
5. Rate of interest to be allowed to each partner on his capital and on his loan to the firm, and
to be charged on his drawings;
6. The ratio in which profits or losses are to be shared;
7. Whether a partner will be allowed to draw any salary;
8. Any variations in the mutual rights and duties of partners;
9. Method of valuing goodwill on the occassions of changes in the constitution of the firm ;
10. Procedure by which a partner may retire and the method of payment of his dues;
11. Basis of the determination of the executors of a deceased partner and the method of
payment;
12. Treatment of losses arising out of the insolvency of a partner;
13. Procedure to be allowed for settlement of disputes among partners;
14. Preparation of accounts and their audit.
Registration of the firm is not compulsory, but non-registration restricts the partners or the firm
from taking any legal action.
Often there is no written Partnership Deed or, if there is one, it may be silent on a particular
point. In that case the relevant sections of the Partnership Act will apply. If on any point the
Partnership Deed contains a clause, it will hold good; otherwise the provisions of the Act relating
to the questions will apply.
5. Powers of partners
The Partners are supposed to have the power to act in certain matters and not to have such powers
in others. In other words, unless a public notice has been given to the contrary, certain contracts
entered into by a partner on behalf of the partnership, even without consulting other partners
are binding and the provisions of the Act relating to the question will apply. In case of a trading
firm, the implied powers of partners are the following:
(a) Buying and selling of goods;
(b) Receiving payments on behalf of the firm and giving valid recepit;
(c) Drawing cheques and drawing, accepting and endorsing bills of exchange and promissory
notes in the name of the firm;
(d) Borrowing money on behalf of the firm with or without pledging the inventories-in-trade;