Which of the following statements are true in the context of partnership?

A) Partnership comes into existence as a result of agreement among the partners.

B) The partnership agreement can be either oral or written.

C) The document, which contains terms of the agreement is called ‘Partnership Deed’.

D) The clauses of partnership deed can be altered with the consent of majority of the partners.

E) The deed should be properly drafted and prepared as per the provisions of the ‘Partnership Act’

Choose the correct answer from the options given below.

A, B and C only

The correct answer is option 1- A, B and C only.

A) Partnership comes into existence as a result of agreement among the partners. This is true.

B) The partnership agreement can be either oral or written. This is true.

C) The document, which contains terms of the agreement is called ‘Partnership Deed’. This is true.

D) The clauses of partnership deed can be altered with the consent of majority of the partners. This is false as the clauses of partnership deed can be altered with the consent of all the partners not the majority of partners.

E) The deed should be properly drafted and prepared as per the provisions of the ‘Partnership Act’. This is false as the deed should be properly drafted and prepared as per the provisions of the ‘Stamp Act’ not partnership act.

Partnership comes into existence as a result of agreement among the partners. The agreement can be either oral or written. The Partnership Act does not require that the agreement must be in writing. But wherever it is in writing, the document, which contains terms of the agreement is called ‘Partnership Deed’. It generally contains the details about all the aspects affecting the relationship between the partners including the objective of business, contribution of capital by each partner, ratio in which the profits and the losses will be shared by the partners and entitlement of partners to interest on capital, interest on loan, etc. The clauses of partnership deed can be altered with the consent of all the partners. The deed should be properly drafted and prepared as per the provisions of the ‘Stamp Act’ and preferably registered with the Registrar of Firms.