What is a Deed of Partnership?

• A. A binding legal document which states the formal rights of partners
• B. A financial record of profits
• C. A list of suppliers
• D. A government license

Answer: (A)

A Deed of Partnership is a binding legal agreement that sets out the terms on which a partnership will operate. It describes each partner’s rights and duties, how profits and losses are shared, how decisions are made, the capital contributions each partner brings, how drawings are treated, and what happens if a partner leaves or a new partner is admitted. Because it’s a formal, legally enforceable document, it helps prevent disputes by clearly outlining expectations and procedures. It’s not simply a financial record of profits, a list of suppliers, or a government license.