DRAFT PARTNERSHIP DEED

THIS Partnership Deed made at ............ this.................... Day of ......................

20............
BETWEEN
1. FIRST PARTY, and
2. SECOND PARTY,

(BOTH THE FIRST & SECOND PARTY SHALL BE COLLECTIVELY REFERRED TO AS

PARTNERS)
WHEREAS the First Party is _________________
WHEREAS the Second Party is _______________
NOW The First & Second Party are interested in forming a Partnership under the and
that they intends to write done the terms and conditions of the said formation and
IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS
1. A Partnership shall be carried on in the name and style of _____ shall be formed
2. The Partnership shall have its registered office at _______________ India and/or at
such other place or places, as shall be agreed to by the majority of the partners from
time to time.
3. The Capital of the Partnership shall be _______ which shall be contributed by the
partners in the following proportions.

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First Party: Rs ________

Second Party: Rs _________
The further Capital if any required by the Partnership shall be brought by the partners
in their profit sharing ratio.
4. All the Partners of the Partnership are entitled to share profit and losses in the ratio
of their respective capital in the Partnership.
5. The business of the Partnership shall be engaged in the business of ____________.
Admission of New Partner
6. No Person may be introduced as a new partner without the consent of all the existing
partners. Such incoming partner shall give his prior consent to act as Partner of the
Partnership.
7. The capital of the partner may be tangible, intangible, Moveable or immoveable
property and the incoming partner shall bring minimum capital of Rs. _____.
8. The Profit sharing ratio of the incoming partner will be in proportion to his capital
towards Partnership.
Rights of Partner
9. All the partners hereto shall have the rights, title and interest in all the assets and
properties in the said Partnership in the proportion of their capital.
10. Every partner has a right to have access to and to inspect and copy any books of the
Partnership.
11. Each of the parties hereto shall be entitled to carry on their own, separate and
independent business as hitherto they might be doing or they may hereafter do as
they deem fit and proper and other partners and the Partnership shall have no
objection thereto provided that the said partner has intimated the said fact to the
Partnership before the start of the independent business and moreover he shall not
uses the name of the Partnership to carry on the said business.
12. That notwithstanding anything contained in the Indian Partnership Act it is hereby
mutually agreed to by and between the parties that in case of death of any one or
more partners, the firm shall not be dissolved but shall continue to be carried on by
and between the surviving partners and legal heirs and/or representatives of the
deceased partner, as a continuing concern, on the same terms and conditions as
incorporated in this Deed or on such terms and conditions as may be agreed to by
and between them from time to time. It is hereby further clarified that it shall be
deemed as change in constitution and not succession.
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13. All bonds, bills, notes, bills of exchange, hundies or promissory notes or other
securities given on behalf of the partnership (except cheques) shall be signed,
endorsed, accepted or executed jointly by all the Partners and any bond, bill, note,
bill of exchange, etc. to which any partner may be a party contrary to this provision
shall be deemed to have been on the personal account of such partner and he shall
pay and discharge the same out of his own moneys and indemnify other partners
and the firm against payment thereof and against all actions, proceedings, costs,
charges, expenses, claims and demands in respect thereof.
Duties of Partners
14. That First & Second Party shall actively engage in conducting the affairs of the
business of the partnership firm. The said partners shall be working partners. It is
hereby agreed to that in consideration of the said parties keeping themselves
actively engaged in the business of the partnership firm and working as working
partners, shall be entitled to remuneration.

The remuneration payable to the said working partners shall be computed in the
manner laid down or deduction under section 40(b)(v), read with Explanation 3 of the
Income-tax Act, 1961 or any other applicable provision as may be in force in the
income-tax assessment of the partnership firm for the relevant accounting year
15. Every partner shall account to the Partnership for any benefit derived by him without
the consent of the Partnership from any transaction concerning the Partnership, or
from any use by him of the property, name or any business connection of the
Partnership.
16. Every partner shall indemnify the Partnership and the other existing partner for any
loss caused to it by his fraud in the conduct of the business of the Partnership.
17. Each partner shall render true accounts and full information of all things affecting the
Partnership to any partner or his legal representatives.
18. In case any of the Partner of the Partnership desires to transfer or assign his interest
or shares in the Partnership he has to offer the same to the remaining partners by
giving 15 days notice. In the absence of any communication by the remaining
partners the concerned partner can transfer or assign his share in the market.
19. No partner shall without the written consent of the other Partners ,-I.

Employ any money, goods or effects of the Partnership or pledge the credit
thereof except in the ordinary course of business and upon the account or for
the benefit of the Partnership.

II.

Lend money or give credit on behalf of the Partnership or to have any

dealings with any persons, company or firm whom the other partner
previously in writing have forbidden it to trust or deal with. Any loss incurred
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through any breach of provisions shall be made good with the Partnership by
the partner incurring the same.
III.

Assign, mortgage or charge his or her share" in the Partnership or any asset
or property thereof or make any other person a partner therein.

IV.

Compromise or compound or (except upon payment in full) release or

discharge any debt due to the Partnership except upon the written consent
given by the other partner.

20. Each partner shall-I.

Punctually pay and discharge the separate debts and engagement and
indemnify the other partners and the Partnership assets against the same
and all proceedings, costs, claims and demands in respect thereof.

II.

Each of the partners shall give time and attention as may be required for the
fulfillment of the objectives of the Partnership business and they all shall be
the working partners.

Extent of Liability of Partnership

21. Partnership is not bound by anything done by a partner in dealing with a person if
I.

the partner in fact has no authority to act for the Partnership in doing a
particular act; and

II.

the person knows that he has no authority or does not know or believe him to
be a partner of the Partnership.

Miscellaneous Provisions
22. The partnership can be wounded up with the consent of all the partners.
23. The Partnership shall indemnify each partner in respect of payments made and
personal liabilities incurred by him
I.

in the ordinary and proper conduct of the business of the Partnership; or

II.

in or about anything necessarily done for the preservation of the business

or property of the Partnership.

24. The books of accounts of the firm shall be kept at the registered office of the
Partnership for the reference of all the partners.
25. The accounting year of the Partnership shall be from 1st April of the year to 31st
March of subsequent year. The first accounting year shall be from the date of
commencement of this Partnership till 31st March _____.
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26. It is expressly agreed that the bank account of the partnership shall be operated by
the Second Party.
27. That upon the dissolution of the Partnership in any event not hereinafter provided for
the said business, the assets, goodwill and liabilities thereof should absolutely vest
on any one partner mutually decided by the parties to the partnership.
28. That the partners shall be entitled to modify the above terms relating to
remuneration, interest, etc. payable to partners by executing a supplementary deed
and such deed when executed shall have effect unless otherwise provided from the
first day of accounting period in which such supplementary deed is executed and the
same shall form part of this deed of Partnership.
29. All disputes between the partners or between the Partner and the partnership arising
out of the Partnership Deed which cannot be resolved in terms of this deed shall be
referred for arbitration as per the provisions of the Arbitration and Conciliation Act,
1996 (26 of 1996).
IN WITNESS WHEREOF the parties have put their respective hands the day and year
first hereinabove written
Signed and delivered by the
For and on behalf of

(Name of First Party)

(Name of Second Party)

Witness:
a) Name:______________________________________
Address:_____________________________________
Signature:____________________________________
b) Name:_______________________________________
Address:_____________________________________
Signature:____________________________________

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