summarizes the financial aspects of the partnership agreement and the equityrequirements of the general and limited partners with example?
summarizes the financial aspects of the
requirements of the general and limited partners with example?
Partnership Act: When the two or more people run the business for a long time for the future profits its called that partnership.
1. The name of the firm: Under this aspect of the partnership partners must decide the firm name in which they are involved.
2. Name & address of the partners: When the partners were decided to the firm name and then the partners given to the documents for creating the partnership agreement.
3. Nature of business proposed to be carried on by the firm: After the above procedure, the partners must be mentioned the work or nature of the business.
- Salary or commission to be paid by the partner: When the salary or such commission which are to be paid after the financial year. Then I will be mentioned in the partnership agreement.
- Rate of interest on capital & drawing: In the partnership, the partner must be invested in the business that’s called the capital of the partner. On this capital amount, the partners earn the interest amount. This percent of interest is mentioned and the same rule is applicable when any partner drawing in the business.
- The amount of capital & contribution by the partner: The amounts of the capital of partners are invested in the business which is must be mentioned.
- The extent to which partners are to be taken: Under this aspect which are must be mentioned that partners limitation, all the firms' assets or liabilities.
- Amount of withdrawals to be allowed to each partner: This is one of the partnership aspects, under this act amount of withdrawals will be mentioned.
- The profit-sharing ratio: This ratio is affected when partners in or out of the partnership firm.
- The powers & duties among partners: In this aspect partnership the power and duties are mentioned in the partnership act.
- Evaluation of goodwill at the time of admission & retirement. When the partners are retired or
Admission the affected in the profit-sharing ratio.
- The procedure of dissolution: when the firm is not carried out the business then the partners
are dissolved the firm. Dissolution rules are must be mentioned.
- Maintenance of accounts & Auditing: The records of the accounts properly at the year-end and
After the complete, the records check by the auditor.
- Arbitration clause for settlement of disputes among the partner: When any partner is not satisfied with the firm's settlement then used the arbitrary clause.
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