Deed of Partnership

What the document does

The Deed of Partnership provides a written framework for a partnership between a First Part and a Second Part. Blank spaces allow the parties to enter their names, business name, business activity, commencement date, capital contributions and other agreed terms. The partnership continues for an indefinite period unless determined.

The template allows the partners, by mutual consent, to establish factories or branches, enter new lines of business and decide where the business will operate.

Financial and accounting terms

The Deed of Partnership provides for the following financial arrangements:

• Each party's initial contribution and the partnership's total capital must be entered.
• Further finance may be contributed at a rate mutually agreed by the parties.
• Interest may be allowed on capital at the entered rate or another mutually agreed rate.
• Regular account books must record partnership transactions.
• The partners may agree on the date when the books will be closed.
• A profit and loss account and balance sheet must be prepared after closing the books.
• The parties must enter their respective shares of profits and losses.
• The template includes blanks for monthly partner salary and a bonus percentage.

Rights and responsibilities of partners

The Deed of Partnership requires each partner to attend diligently to the business, devote necessary time to it, pay separate personal debts and share relevant business information with the other partner.

Without the other's consent, a partner may not:

• Lend partnership money or extend credit contrary to a written restriction from the other partner.
• Raise or advance a loan in the partnership's name.
• Assign, charge or transfer a share in partnership assets or profits.

A partnership bank account may be opened with mutually selected banks or bankers and operated by the parties singly. Listed rights, including licences, trademarks, registrations, connections, tenancy rights, lease rights and ownership rights, may be treated as partnership rights with equal rights and liabilities for the parties.

Retirement, succession and disputes

The Deed of Partnership allows retirement after the agreed written notice, but requires pending commitments, liabilities, assets and accounts to be settled. Death or retirement does not dissolve the partnership, and the deceased partner's legal heir or representative steps into that partner's place.

On dissolution, the business, assets, goodwill and liabilities vest in one partner mutually selected by the parties. Terms may be amended, annulled or changed without executing a fresh deed. Other matters are governed by the Indian Partnership Act, 1932, and disputes are referred to arbitration under the Indian Arbitration Act.