Partnership Deed Contents And Important Provisions Of Indian Partnership Act 1932
Partnership Deed Contents & Meaning : A partnership agreement in written form is known as Partnership Deed . Partnership Deed contains all important terms and conditions regarding the conduct of the business etc.
As per Indian Partnership Act 1932 ., written agreement is not compulsory. However it is useful to have written agreement as evidence in future for future disputes.
Partnership Deed Contents –
- Name and address of the firm.
- Nature of the business.
- Names of partners and their addresses.
- Term means duration of business, if it is fixed.
- Amount of capital contributed by each partner.
- Drawings allowed to each partner.
- Profit sharing ratio.
- Rate of interest on capital to be allowed.
- Rate of interest on drawings that will be charged.
- Salary / Commission allowable To partners.
- Rate of interest of loan by partners.
- Methods of valuating goodwill.
- Division of work among partners.
- Terms and conditions of admitting a new partner into firm.
- Provisions relating to retirement or death of partner.
- Right and duties of partners.
- Provisions regarding dissolution of firms business.
- Maintenance of accountants & appointment of auditor.
Important Provisions Of Indian Partnership Act 1932 –
If there is no written agreement between the partners or if there is no provision in Partnership Deed regarding certain issues, the following are Important Provisions Of Indian Partnership Act 1932 :
in the following 2 circumstances, the provisions of Indian Partnership Act 1932 are used –
- If written agreement is not exist.
- If written agreement is there, but there is no provision in Partnership Deed regarding such a issue.
Following are the some important provisions of the Indian Partnership Act 1932 :
- Sharing of profits :
The partners should share profits / losses equity.
- Interest on loan by partners :
Interest @ 6% p.a. is to be paid on the loan advanced by partners ‘ to the firm.
- Interest on capital :
No interest on capital is payable on partners capital.
- Interest on drawings :
No interest on drawings is chargeable on drawings of partners ‘.
- Salary / Commission to partner :
No salary or commission is payable to working partner.
If the Partnership Deed is silent on certain issues, the above provisions of the law are used.