Mr.Ashok and Mr.Babu were two sole proprietors doing similar business, They were competing each other in order to attract consumers 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 under among its partners regarding the various policies governing their partnership. The partnership deed (Agreement in writing ), serves this purpose, their deed brings clarity to the partners with regard to partner and 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 approach an auditor to draft a partnership deed for them.
Assuming you are a Auditor, draft a partnership deed for their partnership firm.
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