Partnership deed is the rules and regulations that guides or binding on the agreed parties involved in partnership. According to the Lectric Law Library (2010), Articles of partnership is the name given to an instrument, in writing, by which parties enter into a partnership on the basis of the stated conditions in the document. It is a document which is signed by all the partners and which contains all the matters that pertains to such issues as the name, nature of business, capital, duration of the firm, etc., and governing the mutual rights, duties and liabilities of the partners in the conduct and management of the affairs of the partnership.
Partnership is formed in estate surveying & valuation practice when two or more qualified Estate Surveyors and Valuers come together with a common aim of establishing an estate office. However, before a partnership can be created, there are some constitutional provisions stipulated by the Nigerian institution of Estate Surveyors and Valuer. After the parties have fulfilled these provisions, they can go ahead with the procedure which involves registering their business name with Corporate Affairs Commission and the Estate Surveyors and Valuers Registration Board of Nigeria, writing a partnership deed, pooling resources together for establishment of the firm.
Relevant information contained in a Partnership Deed
According to the Lectric Law Library (2010), the principal/relevant parts of articles of partnership also known as partnership deed are as follows:
- The names of the contracting parties
- The commencement of the partnership
- The duration of the partnership
- The location of business
- The name of the firm must be determined
- Management of the firm
- Partners’ authority
- Partnership decision making
- A provision for the apportionment of the profits and losses among the partners should be introduced.
- Mode of preparation and presentation of annual account of the firm
- A provision is frequently introduced forbidding any one partner to carry on any other business
- Procedure to be followed for expulsion of a partner
- Provision for winding up the business
- Method of dispute resolution whenever it arises
- Proper execution of the partnership deed.
Importance of partnership to the establishment of an Estate firm
- Huge capital outlay: The coming together of the parties in partnership involves pooling their resources together to finance the business thereby making more capital available for the management and running of the firm.
- Specialisation: It brings about more specialization in the services being rendered by the firm as the various partners would have their different area of competence and when harnessed, will boost the services rendered by the firm.
- Quick decision making: Quick and better decision can be arrived at when the partners will meet and rub minds together over a situation, as the saying goes “two good heads are better than one”.
- Continuity: in case of death of any of the partners, the operation of the firm will not come to an end but will continue as against a sole proprietorship where the operation of the firm comes to an end as soon as the proprietor dies.
- Sharing of risks: Estate Surveying and Valuation profession like other professions involves lots of risks, it makes the burden of risk bore by the partners lighter compared to when it is a sole proprietorship.
- Employment opportunities: Since partnership engenders growth; it offers more employment opportunities the firm expands.
- Division of labour: Division of labour encourages specialization, making it possible for the different departments or branches to be better managed and controlled leading to enhanced service quality.
- Growth: The business being run by more than one person, affords greater opportunity for expansion. Through the synergy of ideas and funding.
- Privacy: There is some room for privacy for the operations of the firm and the partners, as the partnership not compelled by law to publicize its account by submitting it to the registrar of companies.
