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Which of the following correctly describes the relationship between a partnership deed and a partnership agreement?

Answer and explanation

Correct answer: Deed is the written form of the agreement

A partnership agreement is the set of terms between partners and may be oral or written. Its written form is called the partnership deed, which records capital contributions, profit-sharing, duties and other terms and serves as legal evidence. Option B is incorrect because a deed is not a bank letter. Option C is incorrect because an agreement can indeed be oral. Option D is incorrect because a deed is not merely a government form but a written contract between partners. Exam tip: remember that a deed is evidence of the agreed terms—while writing is not always mandatory, a written deed provides clear proof in disputes.

Related tags

Partnership AgreementPartnership DeedPartnership AccountsPartnership ActAccountancyPartnership Accounts Basic ConceptsClass 12 Mcq

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