It is the written
and registered document that represents the agreement of partnership. This
document is necessary for the avoidance of future trouble or conflict.
Content of
‘Partnership Deed’:
Name of the firm and Its Address: The deed should contain of the firm and place of its
business.
Name and Address of Partners: The deed should also contains the names and address of
all partners.
Nature
of Firm’s Business: The nature of business proposed to be
carried and its limitation should be included in it.
Duration
of Partnership: Timeframe of partnership should be stated
in it.
Partners’
Capitals: The deed should contain the total amount of capital and
contributions by each partner.
Interest
on Capital: If the partners decide to change interest
on their capitals, the rate should be mentioned in the deed.
Drawing
and Interest on them: The deed should contain the limit of
drawings by every partner and the rate of interest to be charged.
Division
of Profit: Profit and loss sharing ratio should be stated in the
deed.
Partners’
Salary and Commission: If the partners decide to pay salary
and commission to the partners, the deed should contain the amount of salary or
commission.
Rights
and Duties of Partners: If any partner has some special rights
and duties regarding conduct of business, these facts should also be mentioned
in it.
Admission
and Retirement of Partners: If any definite procedure is to be
adopted at the time of admission or retirement of partner, it should be stated
in it.
Death
of a Partner: The procedure of calculating the amount due
to a deceased partner.
Valuation
of Goodwill: The method of valuation of goodwill at the
time of admission, retirement or death of a partner should be also be clearly
stated in it.
Accounts
and Audit: The procedure of keeping accounts and their audit
should also be stated in it.
Dissolution
of Partnership: The deed should contain the firm and the
method of the final settlement of accounts.
Arbitration
Clause: In case of disputes the method of appointing
arbitrators and their rights should be clearly mentioned.
