Partnership Deed Drafting

A Partnership Deed (also known as a Partnership Agreement) is a crucial legal document for a business partnership. It is a written agreement between the partners that outlines the terms and conditions governing the partnership, helping to prevent future disputes.

📝 Key Components to Include in a Partnership Deed
A well-drafted Partnership Deed should clearly define the following key clauses:

Firm Details:

Name and Address of the Firm and its branches.

Nature of Business and its objectives.

Date of Commencement and the Duration of the partnership (e.g., "at will" or for a specific period/project).

Partner Details:

Full Names, Addresses, and Contact Details of all partners.

Capital Contribution by each partner (money, assets, or services).

Financial Terms:

Profit and Loss Sharing Ratio (e.g., equal or a defined percentage).

Salary, Remuneration, or Commission (if any) payable to any partner.

Interest on Capital (if provided to partners) and Interest on Drawings (if charged from partners).

Rules for Partner's Drawings (personal withdrawals) from the firm.

Rules for Partner's Loans to the firm and the interest rate.

Management & Operations:

Duties, Responsibilities, and Powers of each partner.

Operation of Bank Accounts (who can sign cheques/transactions).

Accounting Period and procedures for the Preparation and Auditing of Accounts.

Limitations on a partner's authority (e.g., borrowing limits, selling assets).

Future Provisions:

Rules for the Admission of a new partner.

Procedure for the Retirement, Death, or Insolvency of a partner and how their share will be settled.

Valuation of Goodwill and assets upon reconstitution or dissolution.

Dispute Resolution mechanism (e.g., arbitration clause).

✍️ Drafting and Legal Requirements
Mutual Agreement: All partners must first mutually agree on all the terms and conditions.

Clarity: The clauses must be clear, unambiguous, and cover all possible scenarios to avoid future conflicts.

Stamp Paper: The Partnership Deed must be printed on Non-Judicial Stamp Paper of the value prescribed by the Stamp Act of your state. This is essential for the deed to be legally valid and enforceable.

Signatures: It must be signed by all partners and attested by witnesses.

Registration: While not always mandatory under the law, registering the Partnership Firm with the Registrar of Firms (RoF) is highly recommended as it confers certain legal rights on the firm and its partners.