Partnership is created by an agreement. It is not necessary that the agreement should be in writing. It may be oral but to avoid future disputes it is always better to have it in writing. The document in writing containing the important terms of partnership as agreed by the partners between themselves is called the Deed of Partnership. It should be properly drafted and stamped according to the provisidns of The Stamp Act.
Contents of the deed.
The deed usually contains the Following information:
1. Name of the firm.
2. Names of partners.
3. Nature and place of the business of the finn.
4. Date of commencement of partnership.
5. Duration of the firm.
6. Capital employed or to be employed by different partners.
7. Rules regarding operation of bank accounts.
8. Ratios in which profits and losses are to be shared.
9. How the business is to be managed?
10. Rules to be followed in case of admission, retirement, expulsion etc., of a partner.
11. Salaries etc., if payable to partners.