DEED OF PARTNERSHIP
THIS DEED OF PARTNERSHIP is made and executed on this _____ day of __________ by and between:
a. Sh.________________, Currently residing at__________________________ with the permanent address at ___________________________, hereinafter referred to as “First Party”.
b. Sh.________________, currently residing at __________________, with the permanent address at _________________________, hereinafter referred to as the "Second Party".
The First and Second Party hereinafter shall be collectively referred to as the "Parties".
NOW THIS DEED OF PARTNERSHIP WITNESSETH AS UNDER:
That the hereby form a partnership under the name of ____________________.
2. Term of Partnership
That the Partnership shall be deemed to have begun from _____________ and shall continue unless otherwise terminated by the Parties.
3. Place of Carrying Business
That the principle office of the business shall be ________________________ .
4. Profit and Loss
That irrespective of capital investment, profits or losses of Partnership shall be divided and endured by the Parties equally. A separate income account shall be maintained for each partner and any Partnership profit or loss shall be charged or credited to that separate income account. In event of no credit balance in either of the party’s income account, any loss arising shall be charged to their capital account.
5. Capital Contribution & Interest on Capital
That the necessary capital for the Partnership shall be contributed by the partners in cash. Interest shall be charged at the rate of ____ percent per annum or as may be prescribed under Section 40 (b) of the Income Tax Act, 1961 or any other applicable provisions as may be in force under the Income tax assessment of Partnership firm for the relevant accounting period shall be payable to the Parties on account standing to the credit of the account of the Parties. Separate capital accounts shall be maintained for each of the partner.
In case of loss or lower income, rate of interest can be nil or decreased to a lower amount ____ percent. This shall be agreed upon by the parties, from time to time.
That the First Party and the Second Party shall be the working partners in the firm, and they shall be entitled to a salary of Rs. ________ per month and Rs. ________ per month, respectively. The parties, upon mutual agreement can reduce or increase the salaries. The salaries shall be given to both the parties on the ___ day of the month.
7. Maintenance of Accounts
That all the books and documents related to the accounts of the Partnership shall be maintained with utmost precision and shall be closed on the 31st March of every year. These documents shall only be opened to inspection of either of the parties at the Principle place of business of this Partnership.Books shall always be available to either of the parties.
9. Operation of Bank Accounts
That all the funds of the partnership shall be deposited in such a checking account or accounts as decided and designated by the partners.
10. Partners to work in the interests of Partnership
Each Partner shall --
a. work honestly, be perseverant and shall devote their time and attention to the partnership and to any business associated with it.
b. be just and faithful to other partners.
c. give honest and every detail related to any matter, which may affect the proper functioning of the partnership.
d. punctually pay and discharge their debts and liabilities which may arise in their personal capacity.
e. shall do nothing to harm the interests of the Partnership.
11. Partners not to do certain Acts
Neither partner shall,
(a) Engage or be concerned or interested in any business or occupation which has the potential of affecting the Partnership, directly or indirectly;
(b) Take any apprentice or hire or dismiss any agent or servant of the firm, without the permission and consultation of the other Partner;
(c) Lend any of the moneys or deliver, upon credit, any of the goods of the firm to any person or persons without the due consultation or permission of the other partner or any party to whom the other partner shall have previously in writing forbidden him to trust;
(d) Accept, in the ordinary course of business, any security or promise for the payment of money on account of the firm without the consultation or permission of the other partner;
(e) Draw or accept or endorse any bill of exchange or promissory note on account of the firm without the consultation or permission of the other partner;
12. Introduction of a New Partner
That if all the partners agree,a new partner maybe added to the firm in addition to and terms of such agreement shall be mutually drafted between the existing partners and the future partner.
13. Death or retirement of a Partner
That upon the death of either partner, the Partnership shall continue with the nominee/ legal heir of such Partner, joining the firm.
OR if, during the continuance of the partnership, any partner retires or dies, the surviving partner or partners shall have the option,to purchase the deceased’s interest by giving a notice in writing to the retiring partner or to the legal representatives of the deceased partner, as the case may be, within a period of ___ days after the retirement or death.
The purchase price, in such an event, shall be such price as is mutually decided by and between the surviving parties.
If, however, the option to purchase share of the retiring or deceased partner is not exercised as aforementioned, then the partnership shall be wound up and the assets distributed as per the provisions of the Indian Partnership Act, 1932.
14. Dissolution of Partnership
(a) That the Partnership is at will and may be dissolved at any time by mutual agreement of the partners.
(b) That in the case of dissolution of the firm the net realization on the sale of assets shall be distributed amongst the Parties equally after meeting the liabilities of the firm.
(c) The partnership shall be sold along with other assets of the business.
(d) The assets of the partnership shall be distributed in the following manner:-
- To pay for the payment of any liabilities that the partnership has incurred;
- To pay for the liquidating expenses and obligation;
- To discharge the balance of the income AND capital accounts of the partners;
- To equalize the capital account of all the partners to the partnership.
15. Arbitration Clause
Every dispute or difference arising between the partners as to the interpretation, operation, or effect of any clause in the partnership OR any dispute arising due to breach of the contract which cannot be mutually and peacefully resolved, shall be referred to the arbitration of ________________(name of the Arbitrator) failing him, to any other arbitrator mutually chosen by the partners in writing. Any decision given by the arbitrator shall be binding on all partners of the Partnership. The decision of such an arbitrator shall be binding on the Parties of the Partnership. The aforesaid shall be governed by the Arbitration and Conciliation Act, 1996 and the rules made thereunder shall apply to the arbitration proceedings under this clause.
IN WITNESS WHERE OF, the parties have set their hands this ___________ day of ___________.
First PartySecond Party
Witness 1 Witness 2