Partnership Deed

A partnership is a voluntary association of people who come together to achieve common objectives. To avoid misunderstandings later, it is essential to have a clear agreement covering the terms, conditions and all matters concerning the partners.

Meaning: Such an agreement may be oral or written. Although a written agreement is not legally essential, it is advisable because it serves as evidence of the conditions agreed upon. The written agreement that sets out the terms and conditions governing the partnership is called the partnership deed.

Contents of a partnership deed

A partnership deed generally includes:

• Name of the firm
• Nature of the business and its location
• Duration of the business
• Investment (capital) made by each partner
• Distribution of profits and losses
• Duties and obligations of the partners
• Salaries and withdrawals of the partners
• Terms governing the admission, retirement and expulsion of a partner …