what is partnership deed?
Answers
Answer:
Partnership Deed
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.
Importance of partnership deed
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.
Explanation:
Partnership deed is an agreement between the partners of a firm that outlines the terms and conditions of partnership among the partnership.