Partnership Deed is a document containing the terms and conditions of a partnership business. It is an agreement in writing signed by all the partners duly stamped and registered. It defines the rights, duties, and obligations of partners. The partnership deed must not contain any term which is contrary to the provisions of The Indian Partnership Act 1932. Even though it is not necessary to have a written agreement, a written agreement is helpful in preventing and resolving disputes among the partners. The terms and conditions of a partnership deed can be changed with the consent of all the partners.
A partnership deed normally contains the following clauses:
1. Name of the firm.
2. Nature of the firm’s business
3. The principal place of business.
4. Duration of partnership, if any
5. Names and addresses of partners
6. Amount of capital to be contributed by each partner
7. The amount which can be withdrawn by each partner.
8. The profit-sharing ratio.
9. Rate of interest, if any
10. Amount of Salary or commission payable to partners.
11. Allocation of work among partners.
12. Mode of valuation of goodwill.
13. Procedure for admission, retirement, etc. of a partner.
14. Procedure for maintaining accounts and getting them audited.
15. Procedure to be followed in the event of the dissolution of the firm and settlement of accounts.
16. The arbitration clause in case of disputes among partners.
17. Loans and advances by partners and rate of interest payable on them.
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