Partnership Deed: The Written Agreement of Partnership

Partnership is a form of business organization where two or more persons come together to carry out a business with a view to earning profits. The agreement between the partners is called the partnership deed or partnership agreement.

Partnership Deed: Definition

A partnership deed is a written agreement that outlines the terms and conditions of a partnership. It is a legal document that defines the rights, duties, and liabilities of the partners with respect to each other and to the business.

Partnership Deed: Contents

The partnership deed typically includes the following clauses:

1. Name of the partnership
2. Nature of the business
3. Capital contribution of each partner
4. Profit-sharing ratio
5. Duties and responsibilities of each partner
6. Rules for admission of new partners
7. Rules for retirement or expulsion of partners
8. Procedure for dissolution of the partnership
9. Dispute resolution mechanism
10. Any other relevant clauses

Partnership Deed: Importance

The partnership deed is an essential document as it governs the relationship between the partners. It helps to avoid misunderstandings and disputes among the partners. It provides clarity on the roles and responsibilities of each partner, the profit-sharing ratio, and the procedure for admission, retirement, or expulsion of partners.

Partnership Deed: Legality

The partnership deed is a legal document and must be executed on a stamp paper as per the stamp duty laws of the state where the partnership is registered. The partnership deed must also be registered with the Registrar of Firms.

Conclusion

In conclusion, the partnership deed is the written agreement of partnership and is an important document that governs the relationship between the partners. It is a legal document that defines the rights, duties, and liabilities of the partners with respect to each other and to the business.