Islamia University of Bahawalpur

Institute of Business management and administrative sciences

Subject: Financial accounting.

Assignment Title : Short report on partnership business in Bahawalpur.
Submitted to : Sir Farhan Bajwa.
Section : BBA 4th m2.

Group members : Roll no:

 Saqib Hussain
 Areeba Fatima 101
 Younus Ayaz
 Fareeha Ishtiaq. 69
 Nawal Amin. 47
 Umm e Aimen 120

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Table of contents :

Part1:
Partnership..................................................................................................................3
Partnership deed ........................................................................................................3
Importance of partnership deed ..................... .................... ......................................4
Content of partnership deed ......................................................................................4
Characteristic of partnership deed............................................... .............................3

Part2:
Some partnership businesses in Bahawalpur ...........................................................5
A partnership business in Bahawalpur....................................................................6
Information ..............................................................................................................6
All suggested questions...........................................................................................6
SWOT analysis .......................................................................................................10
Recommendation ....................................................................................................11
Conclusion ..............................................................................................................11

Executive Summary: Our all group members participated in interviewing and

answering all suggested questions. Partnership and partnership deed was
done by Saqib and Aimen. Information about some partnership firms was
done by Younus and Younus. SWOT analysis was done by Nawal. The
process of creating a partnership was done by Areeba. Characteristics of
partnership businesses were done by Fareeha. Recommendations were given
to all group members. All information about the poultry farm business was
gathered by all members mutually. The conclusion will also be given to all
members collectively.

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  Partnership:
 A partnership is a form of business where two or more people share ownership, as well as
the responsibility for managing the company and the income or losses the business
generates. That income is paid to partners, who then claim it on their tax returns – the
business is not taxed separately, as corporations are, on its profits or losses.
 Partnership deed: A partnership deed is a partnership agreement  between the partners
of the firm which outlines the terms and conditions of the partnership between the
partners. The purpose of a partnership deed is to provide clear understanding of the roles
of each partner, which ensures smooth running of the operations of the firm. Partnership
comes into the limelight when:
 There is an outcome of agreement among the partners.
 The agreement can be either in written or oral form.
 The Partnership Act does not demand that the agreement has to be in writing. Wherever it
is in the form of writing, the document, which comprises terms of the agreement is called
‘Partnership Deed.’
 It usually comprises the attributes about all the characteristics influencing the association
between the partners counting the aim of trade, the contribution of capital by each
partner, the ratio in which the gains and losses will be divided by the partners and
privilege and entitlement of partners to interest on loan, interest on capital,

 Characteristic of Partnership Deed:

All the rights and responsibilities of each member are recorded in a document known as a
Partnership Deed. This deed can be oral or written; however, an oral agreement is of no use
when the firm has to deal with tax. A few essential characteristics of a partnership deed are:

 The name of the firm.

 Name and addresses of the partners.
 Nature of the business.
 The term or duration of the partnership.
 The amount of capital to be contributed by each partner.
 The drawings that can be made by each partner.
 The interest to be allowed on capital and charged on drawings.
 Rights of partners.
 Duties of partners.
 Remuneration to partners.
 The method used for calculating goodwill.
 Profit and loss sharing ratio

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  Partnership Deed Contents:

While making a partnership deed, all the provisions and the legal points of the partnership deed
are included. This deed also includes basic guidelines for future projects and can be used as
evidence at times of conflict or legal procedures. For a general partnership deed, the below
mentioned information should be included.

 Name of the firm as determined by all partners.

 Name and details of all the partners of the firm.
 The date on which business commenced.
 Firm’s existence duration.
 Amount of capital contributed by each partner.
 Profit sharing ratio between the partners.
 Duties, obligations and power of each partner of the firm.
 The salary and commission if applicable that is payable to partners.
 The process of admission or retirement of a partner.
 The method used for calculating goodwill.
 The procedure that must be followed in cases of dispute arising between partners.
 Procedure for cases where a partner becomes insolvent.
 Procedure for settlement of accounts in the event of dissolution of a firm.

 Importance of partnership deed:

 A few important advantages of a well-drafted deed are listed:

 It controls and monitors the rights, responsibilities and liabilities of all the partners
 Avoids dispute between the partners.
 Avoids confusion on profit and loss distribution ratio among the partners.
 Individual partner’s responsibilities are mentioned clearly.
 Partnership deed also defines a remuneration or salary of the partners and working
partners. However, interest is paid to each partner who has invested capital in the
business.

 How do you write a partnership deed?

Partnership deed is written or created with the following basic information:

1. Name and address of the firm as well as all the partners.

2. Nature of business to be carried out by the firm.

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 3. Date of commencement of business.
4. Duration of partnership (whether for a fixed period/project)
5. Capital contribution by each partner.
6. Profit sharing ratio among the partners.

 Some partnership companies in Bahawalpur.

Skies International Bahawalpur, Pakistan

 Industry: Automotive
 Business Entity: Partnership
 No of Partners: 2
 Location: Bahawalpur, Punjab, Pakistan
 Established In: Jan 2020

 About:-
This company was established in 2019 in Lahore, Gulberg. Due to Pandemic we moved
in Bahawalpur in out homeland. We are working for a UK CAB company, which is
location in London. We are responsible for inbound Customer Support, Bookings and
other Queries.

Android Bull, Bahawalpur, Pakistan

 Industry: Computer Software
 Business Entity: Partnership
 No of Partners: 3
 Location: Bahawalpur, Punjab, Pakistan
 Established In: Jan 2020

 About:-A new startup building and publishing mobile apps to the Android market.

Pakistan Professional Services, Bahawalpur, Pakistan

 Industry: Information Technology and Services
 Business Entity: Partnership
 No of Partners: 2
 Location: Bahawalpur, Punjab, Pakistan
 No. of Employees: 218
 Website: www.ppss.com.pk

 About:-

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 Consultancy, Employee Outsourcing, Professional Trainings, Internships, Study Visa
Consultancy, Event Management, & other professional services.

Partnership Business Name: City poultry shed.

 Nature :
City poultry shed is a wholesale business.
 This poultry farm business has been set up for one year.
 Location;
This business is located In Sadiq public school near deera Izzut Bahawalpur. Poultry farm
business requires an environment with less crowded people and more space. Therefore,
this farm is placed in an isolated place.

 Description;
Our business is a poultry farming business. We raise various types of domestic birds
commercially for the production of meat, eggs and feather. It doesn’t require a high
investment as these birds are not expensive. This business generates high revenue from
these products. Poultry farming has been an old business that generates a lot of profit.

 Purpose of business;
I already had a degree in the poultry sector and my goal was to establish a profitable
business. So, I decided to start a poultry farming business.

 Background and skills;

As I mentioned earlier, We already have a degree in this field. Moreover, I did overall
research and a market survey to gain knowledge. We also did an internship in many firms
such as country shed for the experience. After that, we decided to begin the business.

 Form of business;
Our business “ City poultry shed” is a partnership business.

 Partners;
Our business consist of three partners. Shehroz Ahmed, Rasheed Tahir, Adnan Qureshi.

Partnership period;
Our business is working in the form of a partnership business for one year.

 Official agreement;

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 As we just have started the business on a small level we have the official document in
form of the partnership agreement in which all provisions are stated and violation of this
provision can lead to serious consequences which are the end of a partnership.

 The Complete Process for creating their partnership business;

Following steps were taken for creating a partnership business.
 Choose your partners:
The very step was choosing partners wisely. They took time in choosing partners and
selected their partners by looking at things like knowledge in this livestock industry,
skills as all partners were already graduated with a degree of Bs poultry science. They
also looked for partners who were financially stable and same vision as them.
 Come up with a name for your partnership:
 After discussing with each other. All partners decide to name their business " City
Poultry shed".
 Register the partnership:
 After that partners decided to register their partnership. They submitted their CNIC and
other essential documents required and got registered by the state.
 Established a partnership agreement:
 A partnership agreement is a legally binding contract that lays out each partner's role,
liability, profit. Thus, they created a partnership agreement and added all essential
provisions to it.
 Open a business bank account:
 To avoid mixing up personal and business funds together and causing confusion. They
created a separate bank account for business
 Choosing an accounting option:
 As business is an earlier stage they are using manually record transactions. It is quite a
time-consuming process and you have to be familiar with accounting terms.

 Characteristics of partnership business;

 Our partnership business is a contractual relationship between our partners.
 Restriction on the transfer of share;
No partner can sell or transfer his share to anybody else to make him a partner in the
business. This can however be done with the consent of all partners
 Unlimited liability;
The liability of each partner in business is unlimited. The creditors have the right to
recover the firm’s debts from the private property of any of the partners.
 Earning and sharing of profit ;
The agreement to carry on business must be to make a profit and share it among all
partners. If the partnership is formed to do some charitable work, it will not be called a
partnership.
 Dissolution;

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 The partnership may be dissolved on the death, lunacy or insolvency of any one of the
partners.

 Pros of our business partnership;

 Business is easier to establish.
 Management is improved with more than one owner.
 In Partnership business partners have a better work-life balance.
 In a partnership business, we can have moral support from our partners when we face any
setbacks.

 Cons of our business partnership;

 We don’t have complete authority in the business. We have to share control of our
business with our partners.
 A lot of emotional conflicts can arise between partners in a partnership business. A lot of
emotional problems can occur in a partnership.
The partnership entails any business losses as well as responsibility for any debts. In
partnership, there is unlimited liability.

 Key elements of partnership working;

The key principles of partnership working are openness, trust, honesty, agreed shared
goals, values, regular communication, respect and confidentiality maintained all the time.

 Maintain effective partnership;

Maintaining the partnership is vital for the success of the business. A lot of effort is
required to maintain the business partnership.
 Communication;
We have developed open and honest communication to maintain our relationship. We
discuss all issues that come up such as money-related issues. Strong, honest
communication has created trust between us.
 proactive and real;
We are always proactive in our day-to-day business dealings. We have also earned
respect for each other by being real. Being over professional can be a bore, and neither
you nor your partner will feel comfortable.
 Stay Consistent and follow-through;
We have maintained consistency and followed through with the promises we have made
in the agreement. As we know nothing can end a partnership other than not fulfilling the
commitments that we have made previously that fast.

 Tax benefits of a partnership;

A partnership is considered a pass-through tax entity. This means that the partnership
doesn’t pay income tax, but instead the profit pass through the company and to owners or

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 partners. Profits are only taxed at a personal level. It helps partnerships to avoid double
taxation. Since a partnership is a pass-through entity, the owners will not have to pay
estimated taxes as an owner of a sole proprietorship would.

 Partners participation;
All three partners in our business are working partners as they have contributed capital to
the business and take an active part in management. Our all partners are fairly
participating in our business activities.

 Seeking advice;
 Potential customers;
We seek out our potential customers in person and interview them. We gather as much
information as we can. We don’t ask customers for a solution or ideas. We ask a question
to validate their needs and wants.
 Industry insiders;
We seek out advice from the people working in our Poultry farm industry as they have
working experience and expertise in this field. These people have great insight into
industry trends.
 Competitors;
We also look after our competitors. What they are doing. Their progress, their advantages
and their methods. We get information about new techniques and begin to imply them.

 Addition of a new partner;

A new partner can be admitted into our when all the partners unanimously agreed. A
partnership agreement is dissolved and a new partnership agreement is created. After the
dissolution of the partnership revaluation of assets and liabilities will be done for the
satisfaction of partners. Moreover, the new partner has to pay some extra money in
addition to his investment because of the partnership's goodwill. The profit and loss
sharing ratio will also change after the admission of a new partner.

 Partners resignation;
When a partner will decide to resign or leave our poultry business partnership agreement
will be dissolved automatically and it will have no legal ground. Then we will split all debts,
assets and capital according to our share in the business and the amount of capital invested.

 Death of a partner:
 Sometimes, certain unfortunate circumstances occur and one of your partners can die. If a
partner dies in our business, the partnership will be dissolved automatically. Then we
have put down two conditions. The deceased estate takes over their share of the
partnership.

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  Deceased family members such as his wife, son, daughter can overtake his estate
according to his share in the business.
 Another option is to buy out the deceased share by the current market value of his share.

 Maintaining accounts:
Yes, we have been recording all transactions taking place in our business in the books of
accounts. Moreover, all accounts involved in a partnership business has been maintained
by us.

 Profit utilization:
As you know our business has just established and it is a growing phase of our business
so we are using our profits to grow our business. We are reinvesting our business profits
so that they can develop and thrive more. As you know, we are working in a small place.
Now we are thinking of moving out to a bigger location and buying more hens before Eid
ul azha so that we can sell them in time. After Eid ul azha demand for meat decreases.

 Profit calculation period:

We calculate our profits every quarter. After every three months, we calculate our
expenditures and revenue to find our income.

 Profit calculation:
 We compile our revenue for three months.
 We compile our operating costs and expenses.
 Then we subtract our operating cost from revenues to calculate income.
 Then we add our operating income with any other income such as discontinuous income.
 Then we gain our partnerships net profit.
 After that, we divide this profit according to several shares in the business and work done
by each partner.

 The distribution ratio of profits between partners:

It is the distribution of profit and loss between the partners according to their share in the
business. The distribution ratio of my farm is 3:4:3 concerning Shehroz Ahmed Adnan
Qureshi, Rasheed Tahir.
 Shehroz has 30% of its share in its business.
 Adnan Qureshi has 40% of its share of its business.
 Rasheed Tahir has 30% of its share of its business.

 Characteristic of their partnership deed:

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 We tried our best to get a partnership deed. But the owner’s of the
poultry farm didn’t give us a partnership deed. So we were not able to write
characteristics of their partnership deed.

SWOT analysis of their business :

 Strength:
 Sales are made mostly in terms of cash or a lower debtor turnover period is a norm in
this business. They have some of the latest tools and equipment to help grow and
produce eggs. They also have a wide range of target markets.
 Weaknesses:
 Lack of research and development. Perishable items. It is a highly fragmented
business. They are new in this business so it will take time for them to the attraction
of big customers to the poultry industry.
 Opportunities :
 The opportunities available to them as a poultry farm is that they cannot be
quantified. There are loads of households and businesses such as hotels and fast-food
restaurants that can’t do without a daily supply of chicken and eggs. They are well-
positioned to the advantage of this opportunity.
 Threats:
 Fluctuation in the economic condition of the economy. Poor infrastructure and
disease in parents stocks such as bird flu. High competition. Lack of required
regulations by the government of Pakistan. All these are proved to be threats to their
business.

 Recommendation:
You should replace the location of your farm with a big and better place. You should
also. add some of your profit earned in the general reserve accounts so that you don't have to
face any kind. of money related issues. You should give more emphasis to research and
development. You should attract more customers by understanding their needs. You also have to
improve your infrastructure. Be cautious of different viruses such as bird flu especially in these
times of covid 19 pandemics. You should try to widen your target market. You should adopt a
software accounting method to record transactions in a fast and better way.

 Conclusion :
We discussed partnership, partnership deeds, the content of partnership deeds. We pinned
down some partnership businesses in Bahawalpur. Then we talked about the” City
poultry shed” business. We wrote all information about this business. Then we wrote
characteristics of the partnership deed. We discussed the process of creating partnership
of this poultry farm business. Then we did SWOT Analysis of this business. After that we
gave some suggestions about their business.

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