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Chapter: 12th Accountancy : Accounts of Partnership Firms Fundamentals

Accounts of Partnership Firms Fundamentals | Accountancy | Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Partnership deed

Partnership deed is a document in writing that contains the terms of the agreement among the partners.

Partnership deed

Partnership deed is a document in writing that contains the terms of the agreement among the partners. It is not compulsory for a partnership to have a partnership deed as per the Indian Partnership Act, 1932. But, it is desirable to have a partnership deed as it serves as an evidence of the terms of the agreement among the partners.

 

Contents of partnership deed

Generally, partnership deed contains the following:

·        Name of the firm and nature and place of business

·        Date of commencement and duration of business

·        Names and addresses of all partners

·        Capital contributed by each partner

·        Profit sharing ratio

·        Amount of drawings allowed to each partner

·        Rate of interest to be allowed on capital

·        Rate of interest on drawings of partners

·        Rate of interest on loans provided by partners

·        Amount of salary to be allowed to any partner

·        Maintenance of accounts and audit procedures

·        Procedure for admission of a new partner

·        Procedure for retirement of a partner and settlement of dues to the retired partner

·        Method of valuation of goodwill and valuation of assets and liabilities at the time of admission or retirement or death of a partner.

·        Appointment of executors in case of death of a partner and settlement of dues to the legal heirs.

·        Settlement of accounts on dissolution of the firm.

 

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Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail


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