What is Partnership Deed? State its main contents.
The document containing the respective rights and obligations of the members of a partnership is called a partnership deed. It should be signed by all the partners and stamped in accordance with the Indian Stamp Act. Copy of the Deed should be filed at the time of registration with the Registrar of Firms because, without registration, partners cannot enforce the right and obligations laid down in the Deed through the court of law.
Main contents of the Partnership Deed :
- The name of the firm and the names and addresses of the partners who compose it.
- Nature of business and the place where it would be carried on.
- Date of commencement and duration of partnership.
- Capital contributed by each partner.
- The ratio of sharing profits and losses.
- Interest on partners’ capital, loans, etc. (viz) Salaries, commissions etc., if any, payable to the partners.
- Rules regarding operation of accounts.
- Duties, powers and obligations of all the partners.
- Rules regarding management of the firm.
- Rules to be followed in case of retirement, death and admission of a partner.
- Mode of dissolution and settlement of accounts.
- Arbitration clause for settlement of disputes among the partners.
The terms laid down in the deed may be varied by consent of all the partners, and such consent may be expressed or may be implied by the course of dealing.