What is the purpose of a deed of partnership?

A deed of partnership primarily serves to outline the financial contributions of partners involved in a business. This legal document is essential for clarifying each partner's investment, profit-sharing ratio, and financial responsibilities, which helps to avoid misunderstandings and conflicts regarding money matters in the business operation.

The deed can also cover various important aspects of the partnership, such as management roles, decision-making processes, and what happens if a partner wants to leave or if a new partner wants to join. While it may facilitate dispute resolution, its primary purpose is not to resolve disputes but to clearly define the terms of the partnership relationships from the outset, reducing the likelihood of issues arising.

Therefore, the correct answer emphasizes that a deed of partnership defines the financial contributions of partners, ensuring everyone understands their obligations and expectations regarding the business's finances.