THE PROVISIONS IN THE PARTNERSHIP DEEDS

A partnership business may be established without any formality although the partners have certain unavoidable obligations to third parties, they may make such agreement between themselves in respect of the internal management of the firm. It is accordingly usual for people entering into partnership to express their intention in a partnership agreement known as, deed of partnership. There are three forms of making or creating a partnership agreement. They are by express agreement, by estoppel and by law. Deed of partnership can be defined as a document drawn up to clarify the respective positions of the partners in a business.

The provisions in the Partnership Deeds are as follows:

1. Sharing of profit and loss.
2. Management of their business.
3. Duration of the business.
4. Drawing rights.
5. Capital contribution.
6. Interest payable on loans from members.
7. Procedure in the event of death of a member.
8. Admission of new partners.
9. Renumerations / salaries.
10. The names of the partners.
11. The nature of the business.
12. The name of the firm.
13. The objective of the firm.

Conditions Suitable for the Formation of Partnership

1. Partnership is suitable for executing shortterm venture.
2. Partnership is suitable where the ownership and control should not be extended outside the family or friends.
3. Partnership is formed where the success of the business requires the skill or knowledge of experienced members of the partnership, e.g. solicitors.
4. Partnership is formed where large amount of capital is not necessary for a business as a limited company.
5. The partners must have contractual capacity.
6. It must be registered under the Registration of Business Names Cap 171 law of Nigeria, 1958.
7. There must be an agreement called “Deed of Partnership”.