Question

Why is partnership deed prepared? (Answer in one sentence)

Answer 1

Reconstitution of a partnership refers to a situation when there is a change in the existing partnership agreement. ... Thus, the cases such as admission ofa new partner, death / retirement / insolvency of a partner, change in profit sharing ratio, etc., leads to a reconstitution of partnership

Answer 2

A partnership deed is prepared to establish a partnership officially that has all the terms and conditions associated with it to avoid disputes in future.

* It is prepared at the beginning of any new partnership firm.

* The various terms specified in the partnership deed are salary, drawings, interest on capital, profit and loss sharing and many more.

* This is prepared and is important in order to make things clear between the partners.