Difference between Partnership Deed and Partnership Agreement

Partnership is a common form of business organization where two or more people come together to carry out a business venture. In any partnership, it is important to have a formal agreement or deed in place that lays out the terms and conditions of the partnership. These documents serve as a guide to the partners on how the partnership will operate, what are the rights and obligations of each partner, and how the profits and losses will be divided.

Partnership Agreement

A partnership agreement is a legal document that outlines the terms and conditions of the partnership. It is a binding contract between the partners, and it can be oral or written. A written agreement is usually preferred as it provides clarity and reduces the chances of misunderstandings and disputes. The partnership agreement covers various aspects like the nature of the partnership, the business objectives, the rights and obligations of each partner, how the profits and losses will be shared, how the partnership will be dissolved, and the procedures for admitting new partners, etc.

Partnership Deed

A partnership deed is a legal document that contains the terms and conditions of the partnership, but it also includes the registration details of the partnership firm. In most countries, a partnership deed is a mandatory requirement for the registration of a partnership firm. The deed serves as proof of the existence of the partnership and provides legal protection to the partners. It contains details like the name of the partnership firm, the business objectives, the capital contribution of each partner, the rights and obligations of each partner, how the profits and losses will be shared, and the procedures for admitting new partners or dissolving the partnership.

The Difference

The main difference between a partnership agreement and a partnership deed is that a deed is a legal document that is registered with the government authorities, whereas an agreement is a private contract between the partners. The partnership deed contains additional information like the registration details of the partnership firm, which is not included in the partnership agreement.

Another difference is that the partnership agreement can be modified by mutual consent of the partners, whereas the partnership deed can only be altered by following the legal procedures for amendment. The partnership agreement is a flexible document that can be molded to suit the changing needs of the partnership, whereas the partnership deed is a more rigid document that provides legal protection to the partners.

Conclusion

Both partnership deed and partnership agreement are essential documents for any partnership venture. They serve different purposes and contain different types of information. The partnership agreement is a private contract between the partners that outlines the terms and conditions of the partnership, whereas the partnership deed is a legal document that registers the partnership firm and provides legal protection to the partners. It is important for partners to understand the differences between these two documents and ensure that they have both in place for their partnership venture to operate smoothly.

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