“A partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash amongpartners are minimized to a great extent. ”Whenever a partnership is formed, the partners are bound in two kinds of responsibilities. One is the individual responsibility of each partner and the other is the collective responsibility of all the concerned partners.
The acts of partners in normal course of business unite the firm. If the partners work with understanding and collaboration, the company is sure to function flawlessly.
If there is mistrust among them, conflicts are bound to surface every now and then. It is because business is so complex a job that various kinds of decisions are to be taken almost on a daily basis.The past experience of partnership firms show that there are disputes among partners over countless things and this results in the shutting down of the business.
The acts of partners in normal course of business unite the firm. If the partners work with understanding and collaboration, the company is sure to function flawlessly.
If there is mistrust among them, conflicts are bound to surface every now and then. It is because business is so complex a job that various kinds of decisions are to be taken almost on a daily basis.The past experience of partnership firms show that there are disputes among partners over countless things and this results in the shutting down of the business.
So, a partnership deed can be defined as a document that is prepared to explain important points so that the chances of clash are minimized to a great extent. Such a document consists of all the significant clauses like name of the business, contribution of capital, allocation of profit and the like.
Partnership is a document containing all the matters according to which mutual rights, responsibilities and duties of the partners in the carrying out and administration of the matters of the firm are determined. The deed is surely to be signed by all the partners.
A partnership deed can be effected by word of mouth or can be in black and white. In some countries a written accord among partners is indispensable to bind them lawfully whereas in USA such an accord can be oral or on paper.
A written accord should be favored because then nobody can create a row as regards the contents of the deed. There may be disagreements about what was agreed upon earlier if the contents are not presented in writing. A clause mutually agreed to by the partners
Partnership is a document containing all the matters according to which mutual rights, responsibilities and duties of the partners in the carrying out and administration of the matters of the firm are determined. The deed is surely to be signed by all the partners.
A partnership deed can be effected by word of mouth or can be in black and white. In some countries a written accord among partners is indispensable to bind them lawfully whereas in USA such an accord can be oral or on paper.
A written accord should be favored because then nobody can create a row as regards the contents of the deed. There may be disagreements about what was agreed upon earlier if the contents are not presented in writing. A clause mutually agreed to by the partners
should only be made a part of the partnership contract.However if the point of allocation of profit is not addressed to in a deed, each
partner is deemed to get an equal share of profits and is also to bear equal burden in case of loss.
Contents of the Partnership Deed:
*Names of the partners of the firm and their addresses
*Duration of Partnership
*Capital contribution of each Partner and aspects relevant to it like introduction of additional capital, drawings that can be made etc.
*Interests to be paid on Capital, Loans given by partners to the firm, charged on Drawings and the relevant rates of interest
*Aspects relating to salaries, commissions, etc., to be paid to partners
*The ratio in which the profits and losses are to be shared among partners
*Goodwill valuation methodology at the time of incorporating changes in the partnership.
*Rights and Duties of Partners inter se among themselves.
*Name of the Bank/Banks where the business banking accounts should be maintained and the person/persons who are vested with the power to operate the accounts.
*The person/persons responsible for accounting for the business transactions and the place where the books of accounts are to be kept generally.
"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
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