Podcast
Questions and Answers
According to the deed of partnership, what aspect requires the written consent of all partners?
According to the deed of partnership, what aspect requires the written consent of all partners?
- Determining the managing partner.
- Altering the profit-sharing ratio.
- Availing credit facilities from a financial institution. (correct)
- Changing the firm's accounting year.
In the event of a disagreement among partners, what mechanism does the deed of partnership prescribe for resolution?
In the event of a disagreement among partners, what mechanism does the deed of partnership prescribe for resolution?
- A majority vote among the partners.
- Resolution through a court of law.
- Submission to arbitration by a nominated individual. (correct)
- Referral to a designated senior partner for a binding decision.
If a partner decides to retire from the firm, what is the minimum notice period they must provide, according to the deed?
If a partner decides to retire from the firm, what is the minimum notice period they must provide, according to the deed?
- Two weeks.
- Two calendar months.
- One calendar month. (correct)
- Three calendar months.
In the context of the deed, what is the primary role of the 'Managing Partner'?
In the context of the deed, what is the primary role of the 'Managing Partner'?
According to the deed of partnership, how often should the firm's accounts be audited?
According to the deed of partnership, how often should the firm's accounts be audited?
Which of the following is typically included in a deed of partnership?
Which of the following is typically included in a deed of partnership?
According to the deed, which of the following determines the official start of the firm's accounting year?
According to the deed, which of the following determines the official start of the firm's accounting year?
In the event of a partner's death, what action is stipulated in the deed concerning the deceased partner's legal representatives?
In the event of a partner's death, what action is stipulated in the deed concerning the deceased partner's legal representatives?
As per the deed, what is the default profit-sharing arrangement among the partners?
As per the deed, what is the default profit-sharing arrangement among the partners?
How many partners signatures are needed to operate the firm's bank account?
How many partners signatures are needed to operate the firm's bank account?
Flashcards
Deed of Partnership
Deed of Partnership
A legal document outlining the terms and conditions of a partnership between two or more parties.
Business Activity
Business Activity
The type of commercial activity the partnership will engage in.
Place of Business
Place of Business
The physical location where the partnership conducts its primary business operations.
Duration of Partnership
Duration of Partnership
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Capital of the Firm
Capital of the Firm
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Profit Sharing Ratio
Profit Sharing Ratio
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Managing Partner
Managing Partner
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Retirement of Partner
Retirement of Partner
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Death of Partner
Death of Partner
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Arbitration
Arbitration
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Study Notes
- The deed of partnership is made between partners, their fathers, and their addresses
- The partners agree to carry on a business together
Place of Business
- The partnership's principal business location includes a street address, city, state, and PIN code
Duration of Partnership
- The duration of the partnership is at will
Capital of the Firm
- The firm's starting capital is the total contribution from all partners
Profit Sharing Ratio
- The firm's profit or loss will be divided equally among the partners
- These earnings are then transferred to each partner's current account
Management
- The first partner is in charge of day-to-day operations and legal activities, as well as managing; the other partners must work together
Operation of Bank Accounts
- The firm will create a current account in the Partnership Firm Name at any bank
- The first and second partners will jointly manage the account operations as updated to the Banks
Borrowing
- All partners must give written permission for the partnership to use credit facilities from a financial institution
Accounts
- The firms must keep true, correct accounts of all transactions, assets, and liabilities in the ordinary course of business
Records
- Books of account will be kept at the firm's place of business.
- The financial year begins on April 1st, and the balance sheet must be properly audited and signed by all partners
- Every partner can access the books and verify the correctness
Retirement
- A partner who wants to leave the firm must give at least one calendar month's notice
- The remaining partners must pay the retiring partner (or legal representatives) the cost of their share of the firm's assets
Death of Partner
- If a partner dies, their legal representatives become partners in the firm
- If the representative refuses to point to the firm, they are paid the purchase amount calculated on the date of the partner's death
Arbitration
- If partners disagree, they must consult with one arbitrator
- The nominated arbitration's decision is final and binding on all partners
- The Indian Arbitration Act governs such arbitration procedures
- The deed of partnership includes signatures, seals, and witnesses
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