PARTNERSHIP DEED

THIS DEED OF PARTNERSHIP executed on the ………… between (1) Sh.
……………… son of Late Sh………………… resident of ………………… on the
first part and herein after called party number one and (2) Sh. …………… son of
Sh. …………. resident of ……………. On the other part and herein after called
party number two.
WHEREAS both the parties to this deed have come together and decided to start
a business of ______ under the name and style of ______________.
AND WHEREAS the parties to this deed are desirous that the terms and
conditions agreed between them upon which the partnership business shall
henceforth be carried on be reduced into writing.
NOW THEREFORE, THIS DEED OF PARTNERSHIP WITNESSETH AS UNDER:
1. That the partnership business comes into force with effect from …………...
2. That the partnership business be carried on under the name and style of M/S
………………... However, the parties are at liberty to adopt such other trade
name or names as they may consider fit.
3. That the business of the partnership shall be that of ……….. However, the
parties are at liberty to enter into other areas of activities as they may
consider fit from time to time.
4. That the parties have agreed that for the present its place of business will be
at ……………………………. . However, the parties to this deed are at liberty
to shift the place of business to such place or places, as they may consider
necessary.
5. That the capital of the partnership firm shall consist of such sum or sums of
monies as may be required and shall be contributed by the parties in such
proportion as may be agreed from time to time.
6. Each partner shall devote his whole time and attention to the partnership
business and no partner shall without the consent of the other partners
engage in any other business or hold any office or appointment.
7. That all the parties to this deed shall be responsible for and entitled to carry
out the day to day functioning of the partnership firm and shall not do any act
detrimental to the interest of the partnership.
8. i) The parties of the first and second parts shall be entitled to remuneration
and the aggregate yearly remuneration for each accounting year or part
there of shall be as follows:-
a) In respect of first Rs. 3,00,000/-, 90% of the book profit or Rs.
1,50,000 whichever is more.
c) In respect of balance 40% of the book profit.
ii) The parties of the first and second parts shall be paid salary at the
following rates with effect from ……………...
Party of the First part Rs...…...p.m.
Party of the Second part Rs.…….p.m.
However, remuneration paid in terms of para (ii) above shall not exceed the
amount stated in para (i) above. Any excess paid to the partners shall be
debited to their capital account at the end of year.
iii) That the above partners shall be entitled to withdraw any amount from the
partnership firm against the amount standing to the credit of their capital,
current, loan account or his share of profit for the relevant accounting year
in such manner as may be decided by the partners by mutual consent.
The partners shall also be entitled to charge for specific supervisory
services rendered on behalf of the firm.
9. Simple interest at the rate of (As agreed between partners)..... per cent per
annum shall be payable, as decided mutually by the partners by the firm on
aggregate of the net amounts, for the time being standing to the credit of
capital account of the partners together with the proportionate amount
attributable to the partners in the reserves if any of the partnership.
10. That the net profits/losses of the partnership business as per the accounts
maintained by the partners after deduction of all expenses relating to
business of the partnership including rent, salaries and other establishment
expenses as well as remuneration and interest payable to partners in
accordance with this deed of partnership shall be divided and distributed
between the partners on the close of accounting year in any proportion:
1. Sh. ……………… -
2. Sh. ……………… -
11. That the partnership shall maintain regular books of account in the usual
course of its business and which shall further be open to inspection to the
parties to this deed or his authorized agent during the working hours.
12. That the first accounting period of the partnership firm shall be from 1st April
to 31st March each year, when proper profit & loss account and balance
sheet shall be drawn.
13. That the Bank Account or Accounts as and when opened shall be operated
jointly or severally by the parties to this deed.
14. That none of the parties to this deed shall borrow any loan for his personal
use or benefit in the name of the partnership. The partnership shall only be
responsible for those loans or amounts, which have been brought into the
books of account of the partnership and utilized for the benefits of the
partnership.
15. That the parties to this deed shall be honest and faithful to each other and
always act in the manner conducive to the best interest of the partnership.
16. That in the event of the death or retirement of any partners, the firm will not
be dissolved and the remaining partner will carry on the business by
admitting the legal representative of the outgoing partner after executing a
fresh deed of partnership on such terms and conditions as they mutually
agree.
17. That the partners are at liberty to retire from the firm after giving three
month's notice in writing of his intention to do so and on the expiry of the
period mentioned therein he will no more be the partner of the firm and his
account will be settled. That the retiring partner shall not have any rights/
liabilities other than his share of profit/ loss and the balance in his capital
account up to the date of retirement. The retiring partner's account shall be
settled immediately on his retirement. In case the funds with the firm are
insufficient the retiring partner shall be paid an interest at any rate of interest
on the amount payable to him.
18. That no retiring partner shall carry on similar business under the name, which
is identical with or resembles the name of the partnership, i.e. M/S
…………… unless, consented in writing by all other partners.
19. That in the event of any dispute or difference arising between the partners
with regard to interpretation of the terms of this Deed, the matter shall be
referred to an arbitrator, who shall be mutually appointed and whose decision
shall be binding on all the parties.
20. That the terms and conditions of the partnership can be
varied/altered/additions or deletions made thereto with the mutual consent of
the parties.
21. That any other matter not provided for in this Deed shall be governed by the
Indian Partnership Act, 1932 then in force.
IN WITNESS WHEREOF the parties to this deed have set their hands in the
presence of the persons whose names, signatures, and addresses appear
hereunder.
WITNESSES
1.                                                                                                 1.
                                                                                              (PARTY OF THE FIRST PART)
2.                                                                                                 2.
                                                                                              (PARTY OF THE SECOND PART)