Partnership Deed

This Packet Includes:

1. Description and Instructions; and

2. Partnership Deed

Description And Instructions

Partnership Deed

A partnership is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. In India, this type of relationship governed by the Indian Partnership Act, 1932, which extends to the whole of India except the State of Jammu and Kashmir.

Who Can Enter?

A partnership deed can be entered into between persons who have attained the age of majority according to law, competent to contract and are of sound mind and health. The following can enter into a partnership

1. Individual

2. Firm

3. Hindu undivided family

4. Company

5. Trustees

Number of Partners

The number of partners in a firm shall not exceed 20; a partnership having more than 20 persons is prohibited.

Registration

Registration: It is not “necessary” to register a partnership with the Government in most states of the country. (In Maharashtra it is almost compulsory. Check the laws in your state to be sure.) Please note, however, if a partnership is not registered one cannot be legally protected from disputes between partners, thus, it is always prudent to register your partnership with the Government.

Deed Requirements

The “Partnership Deed” must contain:

• The amount of capital contributed by each partner

• Profit or loss sharing ratio

• Salary or commission payable to any partner, if any

• Duration of business, if any

• Name and address of the partners and the firm

• Duties and powers of each partner

• Nature and place of business; and

• Any other terms and conditions to run the business

A partnership deed must be drafted and signed on a stamp paper as per the laws of the place of signing.

After preparation of the deed, it must be signed by all the partners. It must also have signatures of independent witnesses.

If you choose to register the entity, the deed is then submitted to the “Registrar Of Firms” along with the registration form and other supporting documents. On approval of these documents by the “Registrar Of Firms” the “Partnership Firm” is established as a legal entity and can start business under the chosen name.

NOTE: Always seek independent legal, financial and taxation advice in relation to your contribution to the partnership and also before setting up the partnership.

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