What is a partnership deed and what does it contain? Discuss the procedure to be followed whenever differences arise among the partners.

Types of Partners:

1. Active Partners:

   • Contribute capital.
   • Share profits and losses in proportion to their capital contribution.
   • Take an active part in the day-to-day affairs of the business.

2. Sleeping Partners:

   • Contribute capital.
   • Do not take an active part in the day-to-day transactions of the firm.
   • Share profits and losses in proportion to their capital share.

3. Nominal Partners:

   • Neither contribute capital nor take active participation in day-to-day transactions.
   • Not entitled to any share in profit.
   • Are liable for business losses.

4. Minor Partners:

   • Are individuals who have not attained the age of 18 years.
   • Cannot become a partner initially, but can be admitted by mutual agreement of all partners.
   • Eligible for profits but not for defaults or losses.
   • Cannot be admitted when a new partnership is started.

• In addition to these, the text mentions secret partners, limited partners, and partial partners. Partners are eligible only for profits.

Partnership Deed:

• Definition: A partnership deed is a written document, duly stamped and signed by all partners, that outlines all the terms and conditions of the partnership firm. It is essential as it differs from firm to firm.
• Contents: A partnership deed generally includes:
  • The name of the firm.
  • Names and addresses of partners.
  • Addresses of the firm.
  • Nature of business.
  • Address of branches (if any).
  • Date of commencement of business.
  • Shares of capital contributed by each partner.
  • Ratio of sharing profits and losses.
  • Duties of each partner.
  • Division of work among partners.
  • Conditions for the admission of a new partner.
  • Calculation of goodwill in case of death or retirement of a partner.
  • Procedure to be followed at the time of closing the business.
  • Procedure to be followed whenever differences arise among partners.

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