Legal · document template

Partnership deed format

A starting draft of the key clauses in a partnership deed for a partnership firm in India.

This is a starting draft, not legal advice. Have a qualified professional review anything binding before you sign or send it.

Date and place of executionNames, ages and addresses of all partnersName of the firm and principal place of businessNature of businessDate of commencement and duration (at will or fixed term)Capital contribution of each partnerProfit and loss sharing ratioInterest on capital and partners' remuneration (if any)Bank account operation and signing authorityDuties and powers of partnersAdmission, retirement and death of a partnerDissolution and settlement of accounts

Dispute resolution

Disputes between partners shall first be resolved by mutual discussion, failing which they may be referred to arbitration under the Arbitration and Conciliation Act, 1996.

This is a drafting aid only. A partnership deed should be printed on stamp paper of the correct value, signed by all partners and witnesses, and may be registered with the Registrar of Firms. Have it prepared or reviewed by a qualified professional.

Signatures of partners and two witnesses

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How to write a partnership deed

A partnership deed is the written agreement between partners of a firm, covering capital, profit sharing, duties and what happens when partners join, leave or dissolve the firm.

Under the Indian Partnership Act, 1932, a written deed isn't strictly mandatory, but it prevents disputes and is needed for a PAN, bank account and registration.

What to include

Partner details and firm name
Business nature and place
Capital contributions
Profit-sharing ratio
Interest on capital and remuneration
Admission, retirement and dissolution
Dispute resolution

Tips

1Agree profit sharing clearly in writing.

2Decide who can sign cheques and contracts.

3Plan for a partner leaving from day one.

4Consider registration with the Registrar of Firms.

5Compare with an LLP if you want limited liability.

Frequently asked questions

Is a partnership deed mandatory?

A written deed isn't strictly required by law, but it's strongly recommended and needed for practical purposes like opening a bank account.

Does a partnership deed need to be registered?

Registration with the Registrar of Firms is optional but gives benefits, such as the ability to sue third parties in the firm's name.

What stamp duty applies?

It varies by state. Check the current rate for your state.

What is the difference between a partnership and an LLP?

Partners in a traditional partnership have unlimited personal liability; partners in an LLP have limited liability. See our comparison page.