Question

Suppose you and two of your classmates want to start a partnership business after completing your education. Draw up a partnership deed of your proposed business.

Answer 1

Partnership Deed as per the proposed business is as follows:

1. Name and Address of the Firm: Bright Future Tech Solutions, 123 Main Street, Cityville.
2. Names and Addresses of the Partners:
   • Partner 1: [Your Name], 456 Park Avenue, Cityville
   • Partner 2: [Classmate 1 Name], 789 Oak Road, Cityville
   • Partner 3: [Classmate 2 Name], 321 Pine Lane, Cityville
3. Nature of Business: The firm will be engaged in providing IT solutions and services.
4. Duration of Partnership: The partnership shall commence on [Start Date] and continue until terminated by mutual consent.
5. Capital Contribution:
   • Partner 1 will contribute ₹ 50,000
   • Partner 2 will contribute ₹ 50,000
   • Partner 3 will contribute ₹ 50,000
6. Profit and Loss Sharing Ratio: Profits and losses will be shared equally among the three partners in the ratio 1:1:1.
7. Drawing Amount: Each partner can draw up to ₹ 5,000 per month for personal use.
8. Interest on Capital and Drawings: No interest will be paid on capital invested. No interest will be charged on drawings.
9. Salary and Commission: No partner shall be entitled to any salary. However, commission may be paid based on the firm’s profitability at the discretion of all partners.
10. Admission and Retirement of Partner: Admission of a new partner or retirement of an existing partner shall require the consent of all partners.
11. Duties and Rights of Partners: All partners shall actively participate in the management of the firm and work with utmost good faith and honesty. All partners shall be authorized to act as agents of the firm.
12. Dissolution: The firm can be dissolved by the mutual consent of all partners. Upon dissolution, assets and liabilities will be settled amicably among the partners.
13. Dispute Resolution: Any dispute arising shall be resolved through mutual discussion. Failing which, the matter shall be referred to arbitration.
14. This partnership deed can be modified as per mutual agreement before signing. It provides a clear framework for capital contribution, profit sharing, duties, and other important terms for smooth business operation.