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Following Is the Difference between Partnership Deed and Partnership Agreement Mcq

10 October 2021

Partnership Deed vs Partnership Agreement MCQ: Understanding the Difference

When starting a partnership business, it is essential to have a written agreement outlining the terms of the partnership. However, many people confuse a partnership deed with a partnership agreement. In this article, we will break down the difference between the two and test your knowledge with some Multiple Choice Questions (MCQs).

Partnership Deed

A partnership deed is a legal document that outlines the terms and conditions of a partnership agreement. It is a crucial document that defines the roles, responsibilities, and obligations of each partner involved in the business. Some key components of a partnership deed include:

– Name and address of the partnership

– The date on which the partnership was formed

– The nature of the business to be conducted

– The capital contribution of each partner

– Profit and loss sharing ratio

– Duties and responsibilities of each partner

– Method of resolving disputes

– Procedure for admitting new partners or retiring old ones

– Rules for dissolution of the partnership

Partnership Agreement

A partnership agreement is a written agreement that outlines the terms and conditions of a partnership. It is a more comprehensive document that includes all the details that partners need to agree on before starting a business. Some key components of a partnership agreement include:

– Name and address of the partnership

– The date on which the partnership was formed

– The purpose of the partnership

– The capital contribution of each partner

– Profit and loss sharing ratio

– Duties and responsibilities of each partner

– Method of resolving disputes

– Procedure for admitting new partners or retiring old ones

– Rules for dissolution of the partnership

– Non-compete clause

– Confidentiality agreement

– Intellectual property rights

MCQs to Test Your Understanding

1. What is a partnership deed?

a. A written agreement that outlines the terms and conditions of a partnership

b. A legal document that defines the roles, responsibilities, and obligations of each partner involved in the business

c. A document that outlines the purpose of the partnership

Answer: b

2. What is a partnership agreement?

a. A written agreement that outlines the terms and conditions of a partnership

b. A legal document that defines the roles, responsibilities, and obligations of each partner involved in the business

c. A document that outlines the purpose of the partnership

Answer: a

3. What are the key components of a partnership deed?

a. Name and address of the partnership, profit and loss sharing ratio, and duties and responsibilities of each partner

b. Name and address of the partnership, the capital contribution of each partner, and the method of resolving disputes

c. Non-compete clause, confidentiality agreement, and intellectual property rights

Answer: b

4. What are the key components of a partnership agreement?

a. Name and address of the partnership, profit and loss sharing ratio, and duties and responsibilities of each partner

b. Name and address of the partnership, the capital contribution of each partner, and the method of resolving disputes

c. Non-compete clause, confidentiality agreement, and intellectual property rights

Answer: b

Conclusion

In conclusion, a partnership deed and a partnership agreement may sound similar, but they are quite different from each other. A partnership deed is a legal document that outlines the terms and conditions of a partnership agreement, while a partnership agreement is a written agreement that includes all the details that partners need to agree on before starting a business. By understanding the key components of each document, partners can ensure a smooth and successful partnership.

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