Accounting For

Partnership Firm
By-shagun
Partnership
PARTNERSHIP is the relation between
persons who have agreed to share
the profts o a business !arried down
by all or anyone o the" a!ting or
all#

$hara!teristi!s o
Partnership
%&Nu"ber o persons- There should be at least two
persons#
'&Agree"ent- Partnership establish by a agree"ent
and not by operation o law#
(&)awul business- Business o partnership should
be lawul i#e# it should not do bla!* "ar*eting +
s"uggling#
,&Proft -otive Proft- The ob.e!t should be to earn
proft be!ause it !annot be or"ed or servi!e "otive#
/&Proft Sharing- partners should share the profts o
the business in an agreed ratio otherwise e0ually#
1&)iability o Partners- Partners are both an
agent and prin!ipal i#e# parties is bound by the
a!t o other partners and partners are bound by
the a!t o parties#
2&-utual Agen!y- The business o partnership
"ay !arried on by all the partners or any o the"
a!ting or all proble" based on partnership deed#
Partnership 3eed
A written agree"ent signed by all the partners is
!alled PARTNERSHIP 3EE3# It is a legal do!u"ent
with regard to rights+ duties and obligations# It help
in solving various "atters in !ase o disputes a"ong
partners in uture# It !an be oral as well as written# It
!an be !hanged ro" ti"e to ti"e with !onsent o
all the partners# It is also *nown as Arti!les o
Partnership#
$ontents o Partnership 3eed
%&Na"e o partnership fr" and nature o business#
'&Na"e and addresses o partners#
(&$apitals o the partners#
,&Proft sharing ratio#
/&Rate o interest on !apital to be allowed#
1&Rate o interest to be !hanged on drawings#
2&Salaries or !o""ission payable to partners#
4&5aluation o goodwill o the fr"#
6&Settle"ent o a!!ounts on dissolution#
%7&-anner and "ethod o "aintaining the a!!ounts
o he fr"#
%%&Audit o the a!!ounts#
%'&-aintenan!e o ban* a!!ount# 8ho will operate
the fr"9s ban* a!!ount#
%(&Settle"ent o disputes#
%,&Rules to be ollowed on ad"ission+ retire"ent
and death#
Rules In The Absen!e : Partnership
3eed
%&Proft sharing ratio- Profts and losses are to be
shared e0ually a"ong the partners#
'&Interest on !apital- No interest on !apital is
allowed to the partners#
(&Interest on loan-Interest at the rate o 1 ; is to
be allowed on the loans advan!ed by partners to the
fr"#
,&Interest on drawings- no interest on drawings#
/&Re"uneration o partners-No salary+
re"uneration or !o""ission entitled to partners#
1&Ad"ission o a partner- no new partner
will be ad"itted without the "utual !onsent o
all the e<isting partners# To all re!ords o boo* o
a!!ounts and !an e<a"ine the"#
2&Boo*s o a!!ounts- Every partner has a
right o ree a!!ess#