Question

Explain Partnership Deed.

Hint:

A partnership deed reduces misunderstandings and legal disputes by setting clear terms among partners.

Answer 1

Step 1: Definition of Partnership Deed.
A partnership deed is a legal document that defines the terms and conditions under which a partnership business operates. It is signed by all the partners and serves as a written agreement.
Step 2: Components of Partnership Deed.
The partnership deed typically includes:
1. Name of the firm
2. Names of the partners
3. Nature of the business
4. Capital contribution by each partner
5. Profit-sharing ratio
6. Rights and duties of the partners
7. Terms for the admission, retirement, or death of a partner
8. Dispute resolution procedure
9. Duration of the partnership

Step 3: Conclusion.
The partnership deed ensures smooth functioning by clearly specifying the roles, responsibilities, and expectations of each partner. Final Answer: \[ \boxed{\text{A partnership deed is a formal written agreement that governs the operation of the partnership.}} \]