What is a Partnership Deed?

A partnership deed is a formal agreement that outlines the rights, duties, profit sharing, and other obligations of the partners in a partnership. It can be in written or oral form, but it is generally recommended to have a written partnership deed to prevent any potential conflicts in the future:

The partnership deed should include the following details:
General details:
Along with the specified fees, an application form must be completed with the Registrar of Firms of the State in which the firm is located. All partners or their agents must sign and verify the registration application. The application, which includes the following information, can be mailed or delivered to the Registrar of Firms.

ulArrow Name and address of the firm and all the partners.
ulArrow Nature of the business.
ulArrow Date of starting the business.
ulArrow Capital contribution by each partner.
ulArrow Profit/loss sharing ratio among the partners.
Specific details:
In addition to the general details, the partnership deed may include specific clauses to address certain aspects and avoid conflicts. These may include:

ulArrowInterest on capital invested, partner’s drawings, or any loans provided by partners to the firm.
ulArrowSalaries, commissions, or other amounts payable to partners.
ulArrowRights and responsibilities of each partner, including any additional rights granted to active partners.
ulArrowDuties and obligations of all partners.
ulArrowProcedures to be followed in the event of a partner’s retirement, death, or dissolution of the firm.
ulArrowAny other clauses agreed upon by the partners through mutual discussion.
It is important to include all relevant details and provisions in the partnership deed to ensure clarity and avoid disputes among the partners.