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The partnership is a unique business and partners are allowed to decide on their terms of relationship with one another.

To achieve this, a partnership deed is usually prepared.

A partnership deed is a document that enumerates the duties, rights and obligations of each partner.

It is a document that outlines terms and agreements between the partners. 

It spells out the duties and regulations of the business as it relates to the partners and other stakeholders of the business.

A partnership deed is also called a partnership agreement and contains basic information about the business and its partners of the business.

Contents Of A Partnership Deed

A partnership deed usually contains the following information:

1. The name of the business

2. Each partner's name and contact information

3. Terms and conditions of the partnership

4. Date of commencement of business operations.

5. How profits ( or losses) are to be shared among partners

6. Amount of capital contributed by each partner

7. Signatories to the business account

8. Procedures for resolution of conflicts and disagreement

9. Procedure for admission and retirement of partners.

10. Salaries due to partners, if applicable

11. Interest on capital payable to partners

12. The amount of money each partner can borrow.

13. Duration of the business, if any

What Happens When There Is No Partnership Deed

In a situation where no partnership deed exists, The provisions of section 24 of the Partnership Act of 1890 must be followed:

1. Profits and losses will be shared equally 

2. Interest will not be charged on drawing

3. Interest on capital is not payable

4. No partners will be paid salaries, even if they are active partners.

5. No new partner(s) may be introduced unless all existing partners have given their consent

Importance Of Partnership Deeds

1. It serves as a permanent record of the terms and conditions of the business

2. It helps reduce cases of conflicts by clearly stating the business's rules and regulations.

3. It outlines the role and responsibility of the partner. This ensures that the business functions properly

Final words

It is usually preferable to prepare a partnership deed, even if it is not required. This ensures that there is no ambiguity in the role and responsibility of every partner

Moreover, a partnership can help lessen the effect of disputes and conflicts

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