Partnership deed

A partnership deed is a written document containing all the rights and obligations of the partners in the partnership. It is not advisable to create an oral deed, it is always safer to go for creating one.

The following are the essential elements of a partnership deed :

  • Name and address of the firm and all the partners

  • Nature of business

  • Date of commencement of business

  • Time period of partnership, if any

  • Capital contribution of each partner

  • Profit sharing ratio

Every deed must contain the above mentioned elements. Besides these the partners are free to add extra clauses like

  • Interest of capital to be given

  • Interest on drawings to be charged

  • Interest on partner’s loan

  • Partners Salaries or commission

  • Method of keeping accounts books and audit arrangement

  • Duties of each partner

  • Partner’s admission, retirement and death rules, etc.

Sample- Partnership deed is available here. You can go through it for reference.

Partnership deed must be prepared on a stamp paper in accordance of Indian Stamp Act. Each partner must have a copy of the partnership deed. If the firm is to be registered than a copy of the deed have to be filed with the partnership registration application.

Partnership name

Partners are free to choose any name for their partnership firm. But the following rules must be kept in mind :

  • The name should not be identical or similar to another firm’s name doing business in the same line.

  • The name should not contain words expressing sanction or approval of the Govt.¬† unless¬† a written permission by the state govt. has been issued to use such words.