What is a Partnership Deed?
A partnership deed, also called as a partnership agreement, is a record that outlines in detail the rights and functionalities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business.
Partnership comes into the limelight when :
- As an outcome of agreement among the partners
- The agreement can be either in the written or oral form
- The Partnership Act does not demand that the accord has to be in writing. Wherever it is in the form of writing, the document, which comprises terms of the accord is called ‘Partnership Deed’
- It normally comprises the attributes about all the characteristics influencing the association between the partners counting the aim of trade, contribution of capital by each of the partner, ratio in which the gains and the losses will be divided by the partners and privilege and entitlement of partners to interest on loan, interest on capital, etc.,
The sections of partnership deed can be modified with the accord of all the partners. The deed must be appropriately drafted and outlined as per the provisions of the ‘Stamp Act’ and ideally registered with the Registrar of Firms.
The above mentioned is the concept that is explained in detail about Partnership Deed for the class 12 students. To know more, stay tuned to BYJU’S.