DEED OF PARTNERSHIP

Deed of partnership is a legal document that outlines the terms and conditions of a partnership between two or more parties.

Easy Process and Documentation

Required Paperwork

  • Identity proof of all the partners
  • Address proof of all the partners
  • PAN card and Aadhaar card of all the partners
  • Partnership registration certificate, if applicable
  • Partnership agreement
  • Bank account details of the partnership

Process, Service Charges, Time duration

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PROCEDURE PARTNERSHIP DEED PARTNERSHIP DEED MEANING FACTOR NEEDED IMPORTANT CLAUSES/CONTENTS FIRM REGISTRATION NECESSITY TO CREATE PROCEDURE OF REGISTRATION CURRENT OPENING FAQ

PROCEDURE TO DRAFT PARTNERSHIP DEED

This is very simple to get the format of Partnership done. By just doing three simple steps:

Log in to our website—–>Go to the page of Partnership Deed

Fill up all the required fields like the address of the firm, address & identity proofs of all partners, stamp duty, etc.

After providing all details our team of lawyers will work on the draft of partnership deed & once the drafting is done it will be available for you to download on our site.

Please note:You can avail of the partnership deed sample by logging in to our Site. You can make changes to Draft.

WHAT IS PARTNERSHIP DEED?

If someone wants to understand the partnership contract, he or she needs to know how it came to be. When two or more people want to start a business together and split the profits and loses, they form a partnership. This written deal is called a “Partnership Deed.” It could also be called a “Partnership Agreement.” And when a business like this is registered under its own name, it is called a “Partnership Firm.”

PARTNERSHIP DEED MEANING

Partnership Deed is a written Partnership Agreement. It is basically made when two or more people want to start a new business they come together under the mutual understanding with the only purpose to do business & share profits & losses in the decided manner.

Key Points to Remember While Drafting Partnership Deed:

1. Number of Members:
In a Partnership, there is a minimum requirement for two members. Previously there was a limitation on the number of partners as follows:

  • a. Banking business-Less than or equal to ten
  • b. Non-Banking business- Less than or equal to twenty
If there are more partners than the given above then it becomes illegal to continue the business of the partnership.
2. Minimum capital requirement:
There’s no limitation on the requirement of capital at the beginning of the business. Partners can start of the business with as much as minimum capital they want. The calculation of stamp duty also depends on the amount of capital which has been put by partners.
3. The name should be different:
While deciding a name for the firm the care has been taken that it should not indicate any undesirable intention, it should be simple & easy.

WHAT FACTORS ARE NEEDED TO FORM A PARTNERSHIP DEED?

A Partnership Deed is mainly formed on the basis of the following five factors which are given as under:

  1. 1. A partnership deed is basically said to be a contract between the partners of the business. Which binds all the partners in a legal relationship between the partners.
  2. 2. The minimum requirement for forming a partnership is of two members & there is a limitation of ten in case of banking & twenty in case of non-banking business.
  3. 3. All partners should have a mutual understanding for doing a business.
  4. 4. The ratio for profits & losses should be decided among all the partners well in advance.
  5. 5. All partners should maintain the relationship as a principal-agent. Every partner is answerable for the actions of other partners.

IMPORTANT CLAUSES/CONTENTS OF THE PARTNERSHIP DEED

Any standardized partnership deed format should have the following clauses which are important from the firm point of view:

  • Names and Addresses of the firm and its main business;
  • Names and Addresses of all partners;
  • A contribution of the amount of capital by each partner;
  • The accounting period of the firm;
  • The date of commencement of partnership;
  • Rules regarding an operation of Bank Accounts;
  • Profit and loss sharing ratio;
  • The rate of interest on capital, loan, drawings, etc;
  • Mode of auditor’s appointment, if any;
  • Salaries, commission, etc, if payable to any partner;
  • The rights, duties, and liabilities of each partner;
  • Treatment of loss arising out of insolvency of one or more partners;
  • Settlement of accounts on the dissolution of the firm;
  • Method of a settlement of disputes among the partners;
  • Rules to be followed in case of admission, retirement, the death of a partner; and
  • Any other matter relating to the conduct of business. Normally, all the matters affecting the relationship of partners amongst themselves are covered in partnership deed.

As such there is no such standardized format of Partnership Deed, all the relevant topics should get covered in the partnership deed & same should be signed by all the partners.

PARTNERSHIP FIRM REGISTRATION

  • Registration of a Partnership firm is optional under Indian Partnership Act, 1932
  • Registration of the partnership firm can be done at any time before starting of the business of while business is in its continuation.
  • It is always recommended to register the firm as it enjoys more benefits rather than unregistered ones.

WHAT IS THE NECESSITY TO CREATE A PARTNERSHIP DEED

A partnership is a company that exclusively does business with its partners. In comparison to an oral agreement between two or more people, a written contract is far more beneficial. In order to establish and precisely specify company needs, the drafting of a partnership agreement should be the first step. The following list outlines the significance of drafting a partnership deed:

  •  A well-drafted partnership deed specifies the rights, liabilities of the partners, profit sharing ratio among partners, capital requirement, etc.
  •  It avoids the confusion among the partners & state clearly about
    • each & every partner in detail.
  • In future, if any dispute has arisen then it can be settled through referring the partnership deed.

PROCEDURE OF REGISTRATION OF PARTNERSHIP FIRM

I] The first & foremost step while registering a Partnership Firm is to collect the following documents:

a. Address Proof of your firm, e.g. – current account details or any other license applied in the name of your firm.
b. Identity proof of partners – PAN Card, Voters’ ID card, Passport etc.
c. Address proof of partners – electricity bills, ration cards, Aadhaar Card, Passport etc.
d. Attested Partnership Deed
e. Stamp Duty of appropriate value (Through Stamp papers){1}
f. Photographs of all partners.
g. Completely filled application form – Contact numbers of relevant authorities and application forms can be found here :

1. Delhi: Currently, for the state of Delhi, the firm is first required to be registered with the jurisdictional Sub-Registrar office (where the routine property registrations are made) so that due stamp duty is assessed properly by the government official. Once the same is registered as a document with the State Revenue Authority, it needs to be registered with the Registrar of Firms and Society.


2. Mumbai:
3. Kerala:
4. Chennai:

 

Kindly take a note that each state is having different provisions regarding the registration

For manual registration time limit is one month. So it is always preferable to apply for registration online as it is less hassle-free.

As well after finalizing the Draft of the Partnership Deed, it should also notarize the same on non-judicial stamp paper of Rs.200 or more & should be signed by all partners.

To make a Partnership Deed you must log in on our website & fill the required details asking for the following credentials:

II] The second step is to submit the application to the Registrar of Firms along with very much little of fees.

After completion of all the formalities, Registrar should provide the Certificate of Incorporation & enter the name of the firm in his books.
Also, a separate PAN Card should be obtained from the IT Department in the name of the firm.

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FAQS

A partnership is defined as two or more people joining together to launch a business with the purpose of sharing earnings and losses. And the company they ran under the name of the registered firm is known as a “Partnership Firm.” Partners are the individuals who join forces to create a partnership.

A written agreement between two or more parties that requires them to conduct business as a partnership company is known as a partnership deed. It is the most significant document since it contains the firm’s terms and conditions. The obligations, rights, liabilities, and other business-related information are also included. On the basis of this document, all of the business’s operations between all of the partners have been decided.

As per The old Companies Act,1956 there was a limitation on the maximum number of the member that is for banking business it’s 10 & for non-banking business its 20.
The deed was made with the intention of setting out the clear business intention & role of partners & to express the business requirements in a precise form on the paper. As the written document is more valid than the oral one.
 
Although it is not required for partnerships to be registered, doing so is always a good idea. The simple explanation for registration is that registered partnership businesses have certain additional legal protections over unregistered firms. It is important to remember that registering with the Income Tax Department differs from registering a business with the Registrar of Firms. All businesses are required to register for income tax.
 
There is no specific time is given to do registration for the partnership firm. A partnership firm can get registered at any time that is at the beginning or at while business is in continuation.
A Partnership Deed is a written document which gives all the important aspects which are important from the business point of view. The minimum requirement is of Rs.200 on non-judicial stamp paper.

Although registration of a partnership business is not required, as is common knowledge, there are several benefits that may only be obtained by registered partnership firms. The following is a list of them:
It is simpler to approach the court for resolution when there is a disagreement between partners, between a business and partners, between ex-partners and a firm, or between ex-partners and current partners.
It is simpler to bring a claim against a third party if the business is registered.

If a third party sues the company, the company may always attempt to have the claim set off, indicating that the third party owes the company money.

These are the main advantages that registered businesses may only enjoy.

It is absolutely of no issue if the firm did not register. There is no reflection on the functioning of the business. The only thing is that the firm will not be able to enjoy some benefits which are available for the registered firms.
As every coin has two sides there are also some benefits which are only enjoyed by unregistered firms. They are as follows:
An unregistered firm cannot file a suit in the court of law
An unregistered firm does not hold any right even for criminal cases to file in a court of law.
In case if any dispute has arisen between the partners or between partners & firm or between partners & ex-partners, there is no right to the any of the above to refer the dispute to the court of law for resolution.
As it is a legal document containing the formation of a legal entity. You can find the sample of the partnership Deed on our website.
For registration of partnership firm there is a very simple procedure which can be done on our website & we can help you to get it done as given below:
A] For registering a partnership firm first you need to log in on our site, after that, you need to provide all the below details in the given boxes:
a. Address Proof of your firm, e.g. – current account details or any other license applied in the name of your firm.
b. Identity proof of partners – PAN Card, Voters’ ID card, Passport etc.
c. Address proof of partners – electricity bills, ration cards, Aadhaar Card, Passport etc.
d. Attested Partnership Deed
e. Stamp Duty of appropriate value (Through Stamp papers){1}
f. Photographs of all partners.
g. Completely filled the application form
After completion of application form, the draft deed of the partnership will appear on our screen
after the draft has been finalized you need to take print out of the same on non-judicial stamp paper up to Rs.200
Along with the above documents, an Affidavit of all partners for their free consent on the stamp paper of Rs.10 & court fee stamp of Rs.3 on the application form should be pasted.
B] Once all the above requirements are fulfilled one should submit the same application form with prescribed fees to Registrar.

C] After completing all the formalities Registrar should provide a Certificate of Incorporation & enter the name of the firm in his books.

Kindly note that for manual registration time period is one month.
 

A Partnership Deed mainly includes all the factors on which working of the partnership depends. But out of all here are some major factors which have to be there :
The total amount of capital contributed by each partner;
Division of Profit and loss among partners
Management of business
Details of borrowings like loans & advances
Details of bank accounts
The rights, duties, and liabilities of each partner
Method of a settlement of disputes among the partners

In Partnership Firm, the nature of the liability of partners is unlimited. It means one can also introduce his/her personal assets. So there is no restriction on how much capital shall be involved by every partner. It differs from partner to partner.

Regarding the division of earnings and losses among partners. Such a ratio is not given. In general, the business’s income and losses should be split evenly. And a partner should not receive anything other than the portion of his profit that was previously agreed upon, and he should not endure a loss that is more than that which has been agreed upon in accordance with the Partnership Deed.

A Partnership Firm can be dissolved in any of the following ways:
a)If formed for a specific period of time, on the expiry of the term.
b)If it is created with the purpose of performing a certain act, on completion of the act it can get dissolved
c)Death of any partner
d)When a partner becomes insolvent
e)Dissolution by mutual agreement between partners
f)When an event happens which makes the business unlawful, the firm gets dissolved
g)After giving notice from all the partners the firm gets dissolved
h)If the court finds out in a suit that any unfavorable situations then the court may dissolve it.

As the retiring partner, he is the only one who retains rights after retirement, hence all rights and obligations cease to exist in the event of his retirement. in the event that the spouse dies. If the partnership agreement itself is silent, the partnership will continue and the surviving partner will be able to replace the deceased partner. However, if such a clause is absent from the Deed, the Partnership is dissolved.