Essentials of Partnership Deed

Partnership refers to an agreement between two or more persons. To form a partnership firm there is a need for an agreement between the partners. Therefore, a partnership deed is a written agreement specifying certain rules and regulations among the partners. It requires signature by all the partners with an aim to prevent further possibilities of disputes or disagreement arising among the partners.

Features

Written document

A Partnership deed is a written instrument which is easy to preserve, present and is a permanent record. A written instrument can help the authority to delegate the power and responsibilities to the subordinate.

Act as a safeguard

Partnership deed is a legal document which creates confidence in the minds of the partners because it is permanent in nature. It acts as a safeguard in the sense that there cannot be any distortion done to the objectives of the firm.

Obligations of Partners

The liability of the partners for the debts of the business is unlimited, each partner is jointly and severally liable for the partnership’s debts i.e. each partner is liable for their share as well as being liable for all other debts.

Rights and duties

Partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner or his legal representative failing of which he can be held liable.