Commercial Applications
Why is it recommended to have a written partnership deed?
- It is mandatory for registration under the Companies Act.
- It serves as a legal record to resolve disputes.
- It reduces the firm's tax liability.
- It ensures limited liability for all partners.
Answer
It serves as a legal record to resolve disputes.
Reason — A written partnership deed is preferable because it serves as a record for future and helps to resolve disputes, if any, that may arise among the partners. It contains all the terms and conditions on which the partnership has been formed and is signed by all the partners.
Related Questions
Aman and Rohan started a business as partners. They verbally agreed to share profits equally but did not create a written agreement. Later, they had a dispute about profit sharing. What could have prevented this dispute?
- Registering the firm
- A written partnership deed
- Seeking legal advice before starting
- Limiting the number of partners
Registration of a partnership firm is compulsory under the Partnership Act, 1932.
- True
- False
A partnership firm is not registered. The firm lent ₹50,000 to a customer, but the customer failed to repay it. Can the firm take legal action against the customer?
- Yes, as registration is optional
- No, because the firm is not registered
- Yes, if the partners agree unanimously
- No, unless the firm gets registered before filing the case
Statement I: Partnership is an association of two or more persons.
Statement II: Partnership is an agreement between two or more persons.
- Only I is correct
- Only II is correct
- Both I and II are correct
- Both I and II are wrong