Partnership Deed

A partnership can, in principle, be formed by a purely oral agreement, since the Indian Partnership Act, 1932 does not require it to be in writing. In practice, however, partners almost always reduce their agreement to writing to avoid future disputes — such a written document is called the Partnership Deed (also called the Articles of Partnership or the Partnership Agreement).

A Partnership Deed typically contains particulars such as:

• Name and address of the firm, and the name and address of every partner.
• Nature and place(s) of the business the firm will carry on.
• Date of commencement and duration of the partnership, if fixed.
• Amount of capital to be contributed by each partner.
• The agreed profit-sharing ratio among the partners.
• Whether interest is to be allowed on capital, or charged on drawings, and at what rate.
• Salary or commission, if any, payable to a partner for extra work done for the firm.
• The duties, powers and obligations of each partner.
• The method by which goodwill will be valued on the admission, retirement or death of a partner. …