An exhaustive Partnership Deed under the Indian Partnership Act, 1932 covering capital, profit-sharing, management, admission, retirement and dissolution; execute on stamp paper and register with the Registrar of Firms.
DEED OF PARTNERSHIP
(Under the Indian Partnership Act, 1932)
THIS DEED OF PARTNERSHIP is made and executed at [City] on this [Day] day of [Month, Year] BY AND BETWEEN:
1. [Name of Partner 1], S/o / D/o [___], aged about [__] years, residing at [Address], PAN [____] (hereinafter the "First Partner"); AND
2. [Name of Partner 2], S/o / D/o [___], aged about [__] years, residing at [Address], PAN [____] (hereinafter the "Second Partner").
The parties are hereinafter collectively called the "Partners" and individually a "Partner"; the expression includes their respective heirs, executors, administrators and permitted assigns.
WHEREAS the Partners have mutually agreed to carry on business in partnership and to record the terms and conditions in writing.
NOW THIS DEED WITNESSETH AS FOLLOWS:
Clause 1. Name of Firm. The partnership business shall be carried on under the name and style of "M/s [Firm Name]" or such other name as the Partners may mutually agree.
Clause 2. Place of Business. The principal place of business shall be at [Address], and/or at such other place(s) as the Partners may decide.
Clause 3. Nature of Business. The firm shall carry on the business of [describe, e.g. "trading in [goods] / providing [services]"] and any other lawful business mutually agreed upon.
Clause 4. Commencement and Duration. The partnership shall be deemed to have commenced with effect from [Commencement Date] and shall be a "partnership at will".
Clause 5. Capital. The initial capital of the firm shall be ₹[amount], contributed as: First Partner ₹[__], Second Partner ₹[__]. Further capital, if required, shall be brought in as mutually agreed.
Clause 6. Interest on Capital. Interest @ [__]% p.a. (within the ceiling of Section 40(b) of the Income-tax Act, 1961) shall be allowed on the capital standing to the credit of each Partner.
Clause 7. Profit and Loss Sharing. The net profits and losses of the firm shall be shared between the Partners in the ratio First Partner [__]% : Second Partner [__]%.
Clause 8. Remuneration to Working Partners. The working Partners [Names] shall be paid remuneration/salary as the Partners may mutually fix from time to time, subject to the limits laid down in Section 40(b) of the Income-tax Act, 1961.
Clause 9. Drawings. Each Partner may draw such reasonable amounts on account of anticipated profits as the firm's funds permit; drawings shall be adjusted at year-end.
Clause 10. Bank Accounts. The firm's bank account(s) shall be operated by [any one Partner / jointly] as the Partners may resolve.
Clause 11. Management and Duties. Every Partner shall be just and faithful to the others, attend diligently to the business, and render true accounts. Major decisions (borrowing above ₹[limit], acquisition/sale of assets, admission of a partner) shall require the consent of all Partners.
Clause 12. Books of Account. Proper books of account shall be kept at the place of business and shall be open to inspection by every Partner. The accounting year shall be the financial year ending 31st March.
Clause 13. Admission of a Partner. A new Partner may be admitted only with the consent of all the existing Partners (Section 31 of the Act), on such terms as may be agreed and recorded by a supplementary deed.
Clause 14. Retirement. Any Partner may retire by giving [__] days' written notice to the other Partners; the firm shall not thereby stand dissolved and shall continue among the remaining Partners (Section 32).
Clause 15. Death or Insolvency. On the death or insolvency of a Partner, the firm shall not be dissolved and shall be continued by the surviving/remaining Partners; the account of the outgoing Partner (or legal heirs) shall be settled as per Clause 16.
Clause 16. Settlement on Outgoing. On retirement, death or expulsion, the outgoing Partner (or heirs) shall be entitled to the credit balance of capital, share of undrawn profits up to the date of cessation, and revalued share of goodwill (if any), payable within [__] days.
Clause 17. Goodwill. The goodwill of the firm shall belong to the Partners in their profit-sharing ratio and shall be valued as mutually agreed or, failing agreement, as determined by the auditor.
Clause 18. Dissolution. The firm may be dissolved by mutual consent or in accordance with Sections 39–44 of the Indian Partnership Act, 1932. On dissolution, the assets shall be applied in the order laid down in Section 48 — first towards debts of the firm, then towards Partners' advances and capital, and the surplus shared in the profit-sharing ratio.
Clause 19. Arbitration. Any dispute or difference arising between the Partners shall be referred to arbitration under the Arbitration and Conciliation Act, 1996; the decision of the arbitrator shall be binding.
Clause 20. General. Matters not provided for herein shall be governed by the provisions of the Indian Partnership Act, 1932. This Deed may be modified only by a written supplementary deed signed by all Partners.
IN WITNESS WHEREOF the Partners have set and subscribed their respective hands to this Deed of Partnership on the day, month and year first above written.
____________________
(First Partner) | ____________________
(Second Partner) |
WITNESSES:
1. ______________________ (Name, Address)
2. ______________________ (Name, Address)
