Q.3 What is partnership agreement? Discuss the important points of this document?
Ans: PARTNERSHIP AGREEMENT OR DEED
A partnership is not necessarily created by an agreement in writing. It may be oral agreement or agreement may be inferred from the conduct of the parties though the business may involve millions of rupees. But the agreement may be contained in an elaborate document called the deed of partnership and drafted by a lawyer and it should stamped according to the provision of the Partnership Act, 1932. Partnership deed /must be signed by all the partners. A partnership deed is advisable to register with the registrar.
- PARTNERSHIP deed is a document, which contains all necessary rules and regulations required to run the partnership business.
- PARTNERSHIP agreement is a document, which determines the rights and duties of partner in partnership.
The document, which contains all the provisions of partnership, is called partnership agreement.
FORMS OF PARTNERSHIP DEED
- Partnership agreement may be oral
- Partnership agreement may be written.
- Partnership agreement may be written registered.
BEST FORM OF PARTNERSHIP DEED
The best form of partnership deed is that it must be written and signed by the all partners, so that partners can know their rights and any dispute or misunderstanding among the partners may be removed in the light of written partnership deed.
CONTENTS OF A PARTNERSHIP DEED
1. NAME OF FIRM
Name or firm should be written in partnership
2. NATURE OF BUSINESS
Nature of the business should be written in it.
Duration of partnership whether it is for definite or indefinite period should be mentioned.
The total capital of the firm and the share of each partner should be written in the partnership deed.
5. DIVISION OF PROFIT AND LOSS
Division of profit and loss of business should be mentioned in partnership deed.
Date of starting the business should be written in partnership agreement. Name of the partners and their addresses should be mentioned in the partnership agreement.
7. NAME OF PARTNERS
Name of the partners and their addresses should be mentioned in the partnership agreement.
The amount of salary payable to any partner for managing the firm should be written clearly.
Location of the business should be written in agreement
10. RIGHTS AND DUTIES OF PARTNERS
The provisions regarding the rights and duties of each partner -are also written in the agreement.
11. ENTRY AND EXIT OF PARTNER
Procedure to be followed for withdrawal or for the admission of new partner should be mentioned in the partnership deed.
12. WAYS OF DISSOLUTION
The manners under which the firm may be dissolved.
13. AUDIT AND ACCOUNTS
Audit and accounts preparation provisions are also mentioned in the partnership deed.
14. SETTLEMENT IN CASE OF DISSOLUTION
At the time of dissolution of a firm, there should he va provision for the settlement of accounts.
In case of any dispute, a provision for arbitration is also available.
The witnesses of agreement provisions are also found in it.
17. DETERMINATION OF GOODWILL
How the value of goodwill is determined. The particular method f>r this purpose is suited in the agreement.
18. LOAN AND INTEREST
Provisions in regard to the amount of loan and interest thereon.
19. DEALING WITH BANK
The name of dealing bank and the names of authorized person’s for, the dealing are also written.
20. DIVISION OF WORK
The division of work among the partners for the management of firm.
21. DEFICIENCY IN CAPITAL
How the deficiency of capital will be covered at the time of need.
22. AMENDMENT IN AGREEMENT
The procedure of amendment in the agreement is also mentioned.
The amount that each partner shall be allowed to withdraw in anticipation of profit and interest thereon.
24. MINOR PARTNER
Procedure and provisions regarding the admission of minor in partnership.
The procedure of revaluation of assets and liabilities at the time of retirement or admission of any partner.
26. TYPE OF PARTNERSHIP
The type of partnership should also be mentioned in partnership deed.
27. DEATH OF PARTNER
The partnership agreement should essentially contain provision that in case of death or insanity of any partner whether heir will be legally entitled to run the business or not.
28. INSOL VENCY OF PARTNER
It is clarified in the partnership agreement that if any partner becomes insolvent, what will be the effects on partnership. What we find in http://paper-writer.org/ middlemarch, romola, daniel deronda,
Advantages And Disadvantages of Partnership Next Post:
Explain the duties, rights and liabilities of each partner