How to make a Partnership Deed

Partnership deed is an oral or written document which acts as the basis for the formation of a partnership firm as it contains the rights and obligations of the partners or the members of the partnership firm.

Partnership deeds we know can be both oral and written, but it will always be wise to go for a written agreement because oral agreements have no value for tax purposes.

The deed made should be on a stamp paper in agreement with the Indian stamp act and each partner should have a copy of the deed. In case the firm is registered, the deed should be filed with the registrar of firms.

Things to be taken care of while creating a partnership deed
 

1. The following clauses should be mentioned in the partnership deed

  • Name and address of the firm as well as the partners
  • Nature of the business to be carried on
  • Date of commencement of business
  • Duration of the partnership
  • Capital contribution of by each partner
  • Profit sharing ratio among the partners
  • Salary or commission payable to any partner
  • Any other terms and conditions to run the business

2. The above mentioned are the basic clauses. There are additional clauses which can be added to the deed if needed these are

  • Method of preparing accounts and arrangement for audit
  • Rules to be followed in case of retirement, death or admission of the partner
  • Division of task and responsibility

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