Definition of Partnership Deed
" The document in writing containing the various terms and conditions as to the relationship of the partners to each other is called the partnership deed ."
Following things will include in the partnership deed :
1 . Name of the firm and nature of the firm . 2 . Date of commencement of business . 3 . Value of the capital of firm and the proportion of partners in it . 4 . Ratio of division of profit or loss among the partners . 5 . Total maximum value of drawing . 6 . What will be the salary of partners ? 7 . Will the capital account be fixed or fluctuating ? 8 . How to bring new capital in the time of necessity ? 9 . How to evaluate the goodwill at the time of death or retirement of any partner ? 10 . Main duties and liabilities 11 . Any term or condition except above .
In partnership accounts , we maintain the capital accounts with two ways . We can either keep fixed capital account and fluctuating capital account . Both are capital accounts but there is small difference of maintaining them .
1 . Fixed Capital
When we show partners ' opening capital fixed in all the year , we open the capital accounts of partner . Opening and closing balance will be same in it .
we have to open current accounts of partners . All the adjustments like interest on capital , taken drawing and salary adjustments are done in partners ' current account
2 . Fluctuating Capital
Fluctuating capital fluctuate everytime when any partner withdraw the money or bring fresh capital or doing any other adjustment with his capital . For showing this , we make the capital account of each partner . We do all the adjustment in the capital account . In these adjustments , we can include interest on capital , profit share , drawing and salary . Opening capital