Deeds

Deed of Partnership

A Deed of Partnership is a written agreement that records the terms governing a partnership firm. It defines the mutual rights, duties, and obligations of the partners, including capital contributions, profit-sharing ratios, and the conduct of the firm's business.

This instrument is a private deed, not a court filing. It is governed by the Indian Partnership Act, 1932, and while a written deed is not legally mandatory to form a partnership, it is indispensable for the firm's practical operations, such as opening a bank account, obtaining GST and PAN registrations, and enforcing contractual rights in court.

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Governing law
Indian Partnership Act, 1932
Sections
s. 4s. 7s. 11s. 13s. 36s. 48s. 54s. 69
Filed before
Not applicable — private deed / instrument, not a court filing (optionally registered with the Registrar of Firms; s.69, Indian Partnership Act, 1932)

When this is the right filing

  • When two or more persons agree to share the profits of a business carried on by all or any of them acting for all.
  • To formally record the terms of a partnership, including capital, profit-sharing, and management, to avoid reliance on the default rules of the Indian Partnership Act, 1932.
  • When the firm intends to open a bank account or apply for tax registrations, as banks and authorities require a written deed.
  • To enable the firm and its partners to sue to enforce their contractual rights, as an unregistered firm is barred from doing so under Section 69 of the Act.
  • Do not use this deed for a company incorporated under the Companies Act or a Limited Liability Partnership (LLP) formed under the LLP Act, as those entities are governed by separate statutes.

What the court looks for

  • Clear identification of all partners, whether individuals or body corporates, with their complete addresses.
  • The precise nature of the partnership business and its commencement date.
  • A definitive schedule of capital contributions and the agreed profit and loss sharing ratio among partners.
  • Clauses addressing the firm's duration, whether it is a partnership at will or for a fixed term.
  • Execution on non-judicial stamp paper of the correct value, with signatures of all partners on every page and attestation by two witnesses.

The structure the court expects

The components of the filed format, in the order they appear. LexPilot fills every one of them from your facts and papers.

  1. 1Recitals
  2. 2Schedule of capital contribution
How it opens
WHEREAS the Parties hereto have mutually agreed to carry on the business of [nature of business] in partnership with each other, with effect from [commencement date], on the terms and conditions hereinafter appearing; AND WHEREAS the Parties are desirous of reducing into writing the terms and conditions of their said partnership.

Bracketed items are filled from your case.

Frequently asked questions

Is registration of a partnership deed mandatory?

Registration of the firm with the Registrar of Firms is not mandatory for the firm's existence but is strongly advised. Section 69 of the Indian Partnership Act, 1932 bars an unregistered firm and its partners from instituting a suit to enforce any right arising from a contract against a third party.

What happens if the deed is silent on profit sharing or interest on capital?

If the deed is silent, the default rules under the Indian Partnership Act, 1932 apply. These include equal sharing of profits and losses under Section 13(b), no interest on capital contributed, and no remuneration to partners for conducting the business.

Can a company or an LLP be a partner in a partnership firm?

Yes, a body corporate such as a company or an LLP can be a partner. The deed must identify the entity by its corporate name, registration number, and registered office, and it must be executed by an authorised signatory pursuant to a board resolution or authorisation.

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