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On the other hand, it is not compulsory to register a partnership deed. A partnership can be legally valid even if the deed is not registered. However, registering the partnership deed provides legal recognition to the partnership.

As a separate legal entity, a company exists independently of its directors and shareholders. This means companies can easily survive the death or departure of such individuals. Furthermore, a private company can have up to 50 shareholders, unlike partnerships which have a limit of 20 partners.

Types of Partnership Deeds General Partnership. A general partnership involves two or more persons carrying out a business purpose or any of them carrying it out for all of the parties. ... Limited Partnership. ... Limited Liability Partnership.

A written partnership agreement should show the following to avoid confusion and disagreements: The name of your business. The contributions of each partner and the percentage of ownership. Division of profits and losses between the partners. Each partner's authority or binding power.

Some advantages of partnership over private limited company include ease of establishment and lower costs. A partnership consists of two or more individuals who own a business together and share all its profits and losses, as well as the right to manage and make decisions on behalf of the business.

Absence of a Partnership Deed Partners will not get a salary. Interest on capital will not be payable. Drawings will not be chargeable with interest. Partners will get 6% p.a. interest on loans to the firm if they mutually agree.

Liability: Shareholders in a company have limited liability, meaning their financial liability is limited to the amount of capital they have invested. In a partnership firm, partners have unlimited personal liability, meaning they can be held responsible for the entire amount of the partnership's debts and liabilities.