what is partnership deed

A partnership deed, also known as a partnership agreement, is a legal document signed by two or more partners who come together and decide to run a business for profit. It outlines the terms and conditions of partnership among the partners, including profit/loss sharing, salary, interest on capital, drawings, admission of a new partner, etc. . The purpose of a partnership deed is to give a clear understanding of the roles of all partners, ensuring the smooth running of the operations of the partnership firm. The contents of a partnership deed include the name of the firm, name and addresses of the partners, nature of the business, the term or duration of the partnership, the amount of capital to be contributed by each partner, and more. A partnership deed defines the position of the partners of the firm, regulates the liabilities, rights, and duties of all partners, and helps to avoid misunderstandings between the partners since all of the terms and conditions of the partnership are specified in the deed. In the case of a dispute among the partners, it will be settled as per the terms of the partnership deed, and there will be no confusion between the partners regarding the profit and loss sharing ratio amongst them. A partnership deed can be oral or written, but it is recommended to have a written document to avoid any legal issues.