In the world of business, a Partnership is a relation which subsists between individuals carrying on a business, including every trade, occupation or profession in common with a view of profit. Partnership is constituted by agreement usually in writing.
How To Make A Partnership Deed
You can make a Partnership deed by following these steps:
Draft the deed.
Print it on a Stamp paper of due value.
Place the signature of each partners at the bottom of all pages.
Two witnesses should sign at the end of the document with their name and address.
Register the deed in a Sub-Registrar office paying the appropriate registration charges.
What To Include In The Partnership Deed
A Partnership deed should contain the following details:
Name, address and age of each partner
The name and address of the Partnership firm
The type of business carried on by the firm
The capital investment of each partner
The liabilities of each partner
The details about retiring partner, incoming partner, outgoing partner etc should be mentioned in separate clauses
The terms and conditions to be followed while running the firm
The profit and loss sharing details of each partner
The dos and don’ts that each partner should follow
The conditions of dissolution of the firm and its consequences
How To Make It Legally Valid
Once you have drafted the agreement it is vital that the agreement needs to be made legally valid. Follow these steps and make your Partnership deed a valid one:
The deed should be printed on a Stamp paper of due value.
The name, address and age of each partner should be correctly mentioned
The address of the firm and type of business should be correctly given.
Each partner should sign the deed after reading the deed thoroughly
The firm should have a name that is not used by any other firm already
The deed should be attested by two witnesses
The firm should not deal with any illegal or unlawful business
Frequently Asked Questions
1. I want to start a partnership firm with my friend who is employed. So he will not have the time to run the business, but can only invest the capital. How should I make this in the agreement?
You can run the business as the working partner. Your friend can be the sleeping partner. A sleeping partner is a partner who does not actively involve in the running of the firm, but is entitled to the profits and loss like the working partner. You can also keep the clause for a remuneration for the working partner in your deed.
2. My partner wants to leave the Partnership firm. We are a total of four partners. What should we do?
A Partner who is leaving is termed as an outgoing partner. Your agreement should be containing the terms and conditions regarding an outgoing partner. The outgoing partner shall be entitled to all the benefits and liabilities till the date of exiting the partnership. You need to create an agreement for the outgoing partner mentioning all the terms and conditions on exit and all partners should sign the agreement.
Create Your Own Partnership Agreement
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