Partnership deed format is referred to as a written legal document that contains agreement among partners who have intention to run business with each other and share profit and losses.
Overview
Partnership Deed Format: A partnership is a type of business where two or more people formally agree to work together. They consent to jointly own the business, divide up the duties of running it, and split any profits or losses it makes. A document called a partnership deed contains a list of these characteristics of partnerships.
Partnership Deed Format
- [NAME OF PARTNERSHIP FIRM]
This agreement of PARTNERSHIP is created at [PLACE] on the [Day, Month, and Year] by & in between.
- [Name of the first partner], Son/Daughter of [ Father’s/Mother’s Name]
Aged [years] by caste [Religion] resident of [House/Flat No. address line1, address line2, City, State, Pin code] hereinafter called the party of the first part.
- [Name of the second partner], Son/Daughter of [Father’s/Mother’s Name]
Aged [years] by caste [Religion] resident [House/Flat No. address line1, address line2, City, State, Pin code] hereinafter called the party of the Second part.
- [Third Partner’s Name], Son/Daughter of [Father’s/Mother’s Name]
Aged [years] by caste [Religion] resident [House/Flat No. address line1, address line2, City, State, Pin code] hereinafter called the party of the Third part.
- [Fourth Partner’s Name], Son/Daughter of [ Father’s/Mother’s Name]
Aged [years] by caste [Religion] resident [House/Flat No. addressline1, address line2, City, State, Pin code] hereinafter called the party of the Fourth part.
Whereas, the parties decided to initiate business as a partnership and it is a legal written partnership deed that contains some terms and conditions.
Now this indenture witnesseth and it is here by covenanted and finalised by and between the parties as follows:-
- Name of the Firm: That the commercial activities of the firm shall be carried on under the name and style of [Name of Partnership Firm] at [Address line1,City,State,Pin code] the partners shall be at liberty to carry on business at such other name or names and at such other place or places as may mutually be agreed between them.
- Commencement: That this partnership shall be deemed to have commenced on [Date, Month, Year].
- Business: That this business of the firm shall be of [Elucidation of Business Activity Undertaken by Partnership Firm] and such other trading/manufacturing items, services and business or business as the partners may mutually decide from time to time.
- Accounting: That the accounts of the firm shall be maintained on a regular basis in the ordinary course of business, Providing True and fair view of its transactions and affairs throughout the financial Year. The books of accounts of firms should adhere to standards of accounting and policy as are applicable in India. The accounting year of the firm shall be the financial year, which starts on April 1st and ends on 31St March. Accounting year may however be changed if mutually agreed by the partners. Partners are required to sign financial statements every year, they have the right to access and verify books of accounts during business hours on working days.
- Capital and Interest: That the amount of finance needed for business should be contributed by partners. That simple interest at such a rate, not exceeding the rate specified in Section 40(b)(iv) of the Income Tax Act 1961 or in any other provision of the Income Tax Act 1961, in the accounting year. Interest shall be payable to the partners on the amount standing to the credit of the accounts of the partners. Such interest shall be calculated at the close of the accounting year and credited to the account of each partner entitled there to. In case of loss no interest may be allowed unless agreed to between the partners.
- Remuneration to Partners: All partners mentioned in the deed have decided to engage in organizational activities in an active manner as working partners and in consideration thereof it has been agreed that they shall be entitled to remuneration.
The amount of remuneration for working partners should be calculated as per book profits in accordance with the explanation 3 to section 40(b) of the Income Tax Act 1961 or any other applicable provision as may be in force in the income tax Assessment of the firm for the relevant accounting year, and will he credited to the accounts of the respective partners at the close of the accounting year as follows:-
(a) On the first 3,00,000 of Book profit ₹1,50,000 or at the rate of
Or in case of loss 90% of Book Profit
(Whichever is higher)
(b) On the balance of at the rate of 60%
Book Profit
The amount of remuneration admissible as above shall be paid in under mentioned ratio:-
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- Allocation of Profit: Net profits /losses of the firm as per accounts maintained by it after adjusting all the expenses shall be divided in the ratio which is mutually decided and accepted by all partners. The agreed ratio is as under
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- [Name of First Partner]S/o [Father’s Name] [Ratio]
- DURATION OF THE FIRM : That this partnership is a partnership at WILL.
Dissolution
In the event of the death of a partner, the firm shall not stand dissolved but shall be continued with the legal representatives or nominees of the deceased partner however, if legal representatives or nominees show their dissent to becoming partner, They are entitled to be paid the part of their share in the partnership firm as on date of deceased partner.
In the event of retirement of a partner, the firm shall not stand dissolved but shall be continued with remaining or additional partners. The retiring partner/s is required to give notice of at least 15 days prior to his retirement date. The retiring partner/s or their legal representatives are entitled to be paid the part of their share in the partnership firm as on date of retirement.
Arbitration
Any disputes / differences, if any, arising between the partners relating to this partnership deed shall be referred to arbitration in accordance with the provision of the Arbitration Act 1996 as in force at [Place].The decision of arbitrator is shall be conclusive and binding on all partners.
Management
Partners in the partnership firm shall mutually decide among themselves which partner will become the Managing Partner of the Firm. The managing partner shall be entrusted with the responsibility to manage daily affairs, banking and perform statutory obligations.
Credit Facility
No Bank Borrowing shall be enjoyed by the partnership firm unless it is approved by all partners of the firm. The approval shall be provided by all partners in written form.
Bank Account
The bank account of the partnership firm shall be opened with the any Nationalized or Private Bank and the same will be operated by single/Joint Signature of any one/all of the partner or any attorney appointed by them and intimated to the bank
Variation
That the terms and conditions of this deed may be altered, modified, varied, added or deleted by any agreement mutually arrived at and signed by all the partners.
IN WITNESS whereof the partners aforesaid have set their respective hands on this instrument the day, month and the year hereinbefore written.
FIRST PARTNER SECOND PARTNER
[Signature] [Signature]
[Address Line ] [Address Line ]
[City, State, Pin Code] [City, State, Pin Code]
THIRD PARTNER FOURTH PARTNER
[Signature] [Signature]
[Address Line ] [Address Line ]
[City, State, Pin Code] [City, State, Pin Code]
WITNESS ONE WITNESS TWO
[Signature] [Signature]
[Address Line ] [Address Line ]
[City, State, Pin Code] [City, State, Pin Code]
Conclusion
Partnership deed is one of the significant documents for running a partnership firm. Vakilsearch provides support and knowledge with respect to the formation of partnership deed and partnership deed format. Get in touch with us to know more.
