Definition of Partnership: ‘relation between persons who have

agreed to share the profits of a business carried on by all or any of them acting for all’. Features: 1. Two or More Persons: 2. Agreement: 3. Business: 4. Mutual Agency: 5. Sharing of Profit: 6. Liability of Partnership: Partnership Deed’: The document, which contains terms of the agreement, between partners, is called ‘Partnership Deed’. Contains: the details about all the aspects affecting the relationship between the partners including • Objective of business, • Names and Addresses of the firm and its main business; • Names and Addresses of all partners; • Contribution of capital by each partner, • Profit & Loss sharing ratio • Interest on capital, • Interest on loan, etc. The clauses of partnership deed can be altered with the consent of all the partners. Maintenance of Capital Accounts of Partners: (I) Fixed Capital Method, (Ii) Fluctuating Capital Method.

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