What is partnership deed? State its contents.

Partnership Deed — A written agreement of partnership is called the Partnership Deed. A partnership can be formed only through an agreement between two or more persons. This agreement may be oral or in writing. A written agreement is preferable because it serves as a record for future and helps to resolve disputes, if any, that may arise among the partners.

The Partnership Deed contains all the terms and conditions on which a partnership has been formed. It is signed by all the partners. Partnership Deed is not a public document. It can be altered at any time with the mutual consent of all the partners. No legal formalities are involved in its alteration.

Contents of Partnership Deed:

A partnership deed usually contains the following details:

(a) Name and address of the firm.

(b) Names and addresses of the partners.

(c) Nature of the firm's business.

(d) Duration of partnership, if any.

(e) Amount of capital invested by each partner.

(f) Profit sharing ratio.

(g) Amount permitted to be drawn by each partner.

(h) Rate of interest, if any, on capital and drawings.

(i) Salary, fee or commission payable to any partner.

(j) Procedure for admission and retirement of a partner.

(k) Procedure for dissolution of the firm and settlement of accounts on dissolution.

(l) Rights and duties of partners.