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.
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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