What is Partnership – Deed?

 Partnership Act Says, the agreement between partners can be oral or written. If it is written, it is better.

 

When the agreement between partners is made in writing, the resulting document which describes the terms and conditions of their arrangement is called Partnership Deed.

 

  • The Partnership Act does not require that the agreement must be in writing.

 

  • The deed generally contains
    • The objective of business,
    • Contribution of capital by each Partner
    • Ratio in which the profits and the losses will be shared by the partners
    • Entitlement of partners to interest on capital,
    • Entitlement to interest on loan.
    • Salary to be paid to the partners, if any.
    • Interest on loan and rate of interest at which this will be paid.

 

  • CHANGE:-The clauses of partnership deed can be altered with the consent of all the partners. The deed should be properly drafted and prepared as per the provisions of the ‘Stamp Act’ and preferably registered with the Registrar of Firms.