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    Partnership Deed

    Uploaded by

    Nahid Chowdhury

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Partnership Deed

    Uploaded by

    Nahid Chowdhury
    16 views2 pages

    Copyright

    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views2 pages

    Partnership Deed

    Uploaded by

    Nahid Chowdhury

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Partnership Deed

    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 and Address of the firm
    2. Name and details of all partners
    3. Nature of Business
    3. Date of commencement of business
    4. Duties of each Partner
    4. Duration of the firm’s existence
    5. Capital contributed by each partner
    6. Profit/loss sharing ratio
    7. Interest on capital payable to partners
    8. The extent of borrowings each partner can draw
    9. Salary payable to partners, if any
    10. The procedure of admission or retirement of a partner
    11. The method used for calculating goodwill
    12. Preparation of accounts of the firm

    13. Mode of settlement of dues with a deceased partner’s executors

    14. The procedure followed in case disputes arise between partners

    Absence of a Partnership Deed


    In case partners do not adopt a partnership deed, the following rules will
    apply:

     The partners will share profits and losses equally.


     Partners will not get a salary.
     Interest on capital will not be payable.
     Drawings will not be chargeable with interest.
     Partners will get 6% p.a. interest on loans to the firm if they mutually agree.

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