What do you understand partnership deed
Answer (1)
28th Oct, 2021
Dear Pradyumn,
Partnership deed is an agreement between the partners of a firm that outlines the terms and conditions of partnership among the partners.
It includes terms like profit/loss sharing, salary, interest on capital, drawings, admission of a new partner,etc.
Proper Deed provides a legal responsibility between partners of firm regulating rights, duties, and liabilities of each partner.
This helps to avoid misunderstanding between the partners because all the terms and conditions of the partnership have been laid down beforehand in the deed.
These are the main things to be noticed in Partnership Deed
- The name of the firm.
- Name and details of all partners.
- Date of commencement of business.
- Duration of the firm's existence.
- Capital contributed by each partner.
- Profit/loss sharing ratio.
- Interest on capital payable to partners.
- The extent of borrowings each partner can draw.
Hope it helps.
Good Luck :)
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