Question

What do you mean by partnership deed write its contents of partnership deed

Answer 1

In the partnership there will be two or more persons . partnership deed means an agreement between the partners in a written format . it is in the written format to avoid litigation and misunderstandings .
contents :
1. name of the firm
2. place of business
3.name of the partners
4.patners contribution
5.profit sharing ratio
6.arbitration in case of misunderstandings between the partners
7. interest rate on capital contributed
8. interest rate of drawings by the partners if any
9. goodwill calculation in case addition , retirement ,death.

Answer 2

Explanation:

Partnership Deed

As explained above, partners are free to define the terms of their relationships, even if they go contrary to the Act in certain cases. They can either decide on such terms with an oral agreement or a written one.

Partnership deeds, in very simple words, are an agreement between partners of a firm. This agreement defines details like the nature of the firm, duties, and rights of partners, their liabilities and the ratio in which they will divide profits or losses of the firm.

Although the drafting of partnership deeds is not compulsory, it is always advised to do so. This helps in ensuring that all terms agreed by partners exist in written form on paper. Doing so can reduce disputes between partners and govern their functioning better.

Unlike similar documents like articles of association of companies, partnership deeds need not be registered mandatorily. However, registration can ensure the prevention of legal challenges to its validity when disputes arise. An ideal partnership deed is comprehensive and clear about all details pertaining to the functioning of a firm. It should not contain any ambiguities.

Contents of Partnership Deeds

Although there is no specific format prescribed for drafting a partnership deed, a typical deed contains the below mentioned clauses.

(1)The name of the firm

(2)Name and details of all partners

(3)Date of commencement of business

(4)Duration of the firm’s existence

(5)Capital contributed by each partner

Profit/loss sharing ratio

(6)Interest on capital payable to partners

(7)The extent of borrowings each partner can draw

(8)Salary payable to partners, if any

(9)The procedure of admission or retirement of a partner

(10)The method used for calculating goodwill

(11)Preparation of accounts of the firm

(12)Mode of settlement of dues with a deceased partner’s executors

(13)The procedure followed in case disputes arise between partners