When two or more persons come together to carry on certain business activities with the object of sharing the profit of business by a mutual agreement, the Partnership Firm comes into existence.
The document containing the agreement between the partners is called “PARTNERSHIP DEED” and such deed is signed by all the partners. The stamp duty as required by the State law must be paid as per the State law where the principle business office of Partnership Firm is situated.
Below mentioned is the list of clauses in the partnership deed:
- Date of entering into the Agreement, if partnership firm already into existence.
- The name of the partnership firm.
- Address of principal business place of the firm.
- The name and address of the partners respectively.
- The nature of business activity of partnership firm.
- The amount of capital contributed by each partner.
- The profit sharing ratio among partners.
- The amount of drawings that can be made by each partner.
- Tenure of partnership.
- The rights and duties of partners.
- The interest to be allowed on capital and charged on drawings.
- The name of the Partner responsible for management & day to day activity should be mentioned.
- The deed should also include notice period for resigning partner and the conditions thereto.
- The name of the person to whom the problem is to be referred as their Arbitrator and Jurisdiction City.
Apart from abovementioned clauses, the conditions or requirements of the partners can also be mentioned in the Partnership Deed.