This article covers all aspects of partnership in India, including core concepts, the legal framework, the components of a partnership deed, and most importantly, a step-by-step guide on how to draft a partnership deed. It aims to provide complete guidance for those unfamiliar with the concepts of partnership in India and those who want to master the skill of drafting a perfect partnership deed. 

Introduction

Imagine going to court completely drenched in sweat, clinging to a heavy brief in your hand. I personally hated that; it was like being in complete roast mode.

Welcome to the Mumbai summers. Some of you reading this know exactly what I am talking about. 

Thankfully, we lawyers, like school kids, get summer holidays.  

So, during the 2024 summer holidays, while most people were off to hill stations or some international trip, I was ticking off my long to-do list of pending work before the court reopened. 

Midway through my coffee, my dad calls me, “Naresh uncle wants to start a business, and he wants your advice on how to go about it.”

“Send him over anytime, but make sure he comes before 6 p.m,” I said this and hung up the call. 

I was excited because I do not like sitting idle; I need something to keep myself busy. 

He walks in. I politely ask him for tea or coffee. I got straight to the point and asked him what advice he needed from me. 

That is when he told me that he had long wanted to start a business of all types of sweets, farsans, milk products, food products, non alcoholic drinks, food stuffs, food provisions, all kinds of bakery products, dry fruits, chocolates, etc. What he was not clear about was how he should structure his business. Some suggested a company, while some suggested a sole proprietorship. He seemed utterly clueless.

And then came another detail, he wanted his wife and his son also to be a part of it. 

I suggested why not go for a partnership business. I explained to him the pros and cons of it. He was convinced and asked me to proceed and draft out the partnership deed. 

So, today, we will learn about the core concept of partnership. Most importantly, I will guide you through drafting a partnership deed, using example of Naresh uncle. 

Are you ready? Let us start.

What is a partnership? 

Firstly, a partnership is a popular form of business in India when two or more people aim to achieve a common objective. You might have surely heard about it.

Partnership form of businesses are governed by the Indian Partnership Act, 1932, I will tell you more about it later in the article. 

So, partnership is defined under section 4 of the Indian Partnership Act, 1932. In simple words, it is a relation between persons who have mutually agreed to carry on a business either jointly or any of them acting for all for a share in the profits of the business. Any two or more persons who are willing to come together for a common objective and are also willing to share profits and losses of the business can form a partnership. 

You must also know that the relation of partnership arises from a contract and not from status. For instance, if the members of a family are simply carrying on a business without entering into any formal agreement, then it will not be regarded as a partnership form of business. 

Now that we have learnt what a partnership is, let us see the difference between different types of entities.

What is the difference between a partnership, a limited liability partnership, and a company? 

I have prepared a detailed table to help you distinguish between a partnership, a limited liability partnership, and a company, and determine which one to choose for a business.

Criteria	Partnership	Limited Liability Partnership (LLP)	Company
Governing Law	A partnership is governed by the Indian Partnership Act, 1932.	An LLP is governed by the Limited Liability Partnership Act, 2008.	A company is regulated by the Companies Act, 2013.
Definition	A partnership involves two or more persons agreeing to share business profits, carried on by all or anyone acting for all.	An LLP is a hybrid entity that blends partnership flexibility with limited liability and a separate legal identity of a company.	A company is a legal entity formed for business, owned by shareholders, and managed by directors.
Legal Status	A partnership lacks a separate legal entity, as the firm and partners are not distinct.	An LLP has a separate legal entity, distinct from its partners.	A company enjoys a separate legal entity, independent of its shareholders and directors.
Liability	The liability of the partners is unlimited, being jointly and severally liable for all firm debts, including personal assets.	Partners’ liability is limited to their agreed capital contribution, protecting personal assets unless fraud occurs.	Shareholders’ liability is limited to unpaid share capital, safeguarding personal assets unless guarantees are given.
Formation	A partnership requires a partnership deed, oral or written, with optional registration.	An LLP requires registration of the firm with the Registrar of Companies and an LLP Agreement.	A company needs registration with the Registrar of Companies, including a Memorandum and Articles of Association.
Minimum and Maximum Members	A partnership requires at least 2 partners and can have up to 50.	An LLP needs at least 2 partners with no maximum limit.	A private company requires 2 to 200 shareholders, a public company needs at least 7 with no maximum, and a One person company has exactly 1 shareholder.
Management	All partners have equal management rights unless the agreement specifies otherwise.	Designated partners manage an LLP, with roles outlined in the LLP Agreement.	Directors manage a company, while shareholders have limited control, mainly through general meetings.
Perpetual Succession	A partnership lacks perpetual succession, dissolving on death, insolvency, or retirement unless agreed otherwise.	An LLP enjoys perpetual succession, continuing despite partner changes.	A company has perpetual succession, unaffected by changes in shareholders or directors.
Dissolution	A partnership dissolves by agreement, notice, insolvency, death, or court order.	An LLP dissolves by agreement, ROC filing, or court order, with a simpler winding-up process.	A company’s dissolution is complex, needing ROC approval and creditor settlements.
Public Disclosure	A partnership has minimal disclosure, only for registered firms with the Registrar of Firms.	An LLP requires moderate disclosure, with LLP Agreement and financials filed publicly with ROC.	A company mandates high disclosure, with financials and director details publicly accessible via MCA.
Suitability	A partnership suits small businesses with high trust and low compliance needs.	An LLP is ideal for professionals or businesses wanting limited liability with flexibility.	A company fits large businesses or startups seeking investment and robust legal structure.

Did you see the difference between the three entities? You might have seen above that I mentioned about partnership deed, let us understand what does it mean.

What is a partnership deed? 

You read above that merely people coming together and carrying on business would not amount to a partnership. For a partnership to come into existence, a contract or agreement, popularly known as a partnership deed, has to be entered into between the individuals. It is section 5 of the Indian Partnership Act, 1932 that states that partnerships arise from contract and not merely status.

A partnership deed is a written agreement outlining the terms and conditions of a partnership. It is a legally binding and enforceable contract between partners that specifies their rights, duties, profit and loss sharing ratio, and other terms. While the Indian Partnership Act allows oral agreements, a written agreement is strongly recommended to avoid disputes and provide legal clarity.

Additionally,, you must also know that the deed of partnership must be executed on stamp paper of appropriate value as per the Indian Stamp Act, 1899 or the state specific laws for instance, in the state of Maharashtra, Article 47 of the Maharashtra Stamp Act 1958 lays down the stamp duty payable on the partnership deed on the basis of the capital contribution.

Was this easy to understand? Let us see the importance of it.

Why is a partnership deed necessary? 

You read about what a partnership is, you also understood what a partnership deed means. It is also crucial to understand the importance of a partnership deed. So the next time you have someone who tells you that a partnership deed is not essential and can be skipped, you have an answer then. Below, let us see why it is necessary. 

1. It provides clarity on the duties and responsibilities of each partner. 
2. Partnership deeds can be legally enforceable in the court of law
3. It helps avoid misunderstanding or differences occurring on account of retirement, death or the addition of any new partner.

It is not just a document; it serves as the backbone of your business. These are just some of the benefits of having a partnership deed. 

The next question coming in your mind would be, whether it is mandatory to register a partnership firm or not.

Is the registration of a partnership firm mandatory?

Let me tell you that it is not mandatory to register a partnership firm under the Indian Partnership Act, 1932, but is highly recommended due to significant legal and practical advantages. 

Did you know section 58 of the Indian Partnership Act, 1932 permits partners to file an application to register their firm with the Registrar of Firms in the relevant State on payment of a prescribed fee, but it does not mandate it. 

Sections 58 and 59 of the Indian Partnership Act, 1932 deal with the registration process and final registration of the firm. Partners can submit an application in a prescribed form to the Registrar of Firms, including details like the firm’s name, place of business, partners’ names, and partnership duration. The application shall be submitted along with the partnership deed. Thereafter, upon payment of a nominal fee and upon verification, the Registrar shall issue a Certificate of Registration, making the details of the firm publicly accessible. You must also know that the registration requirements and fees vary by state. 

Let us check the effect of non-registration of a partnership firm.

What are the effects of non-registration of a partnership firm?

Above, you read about whether registering a partnership firm is mandatory or not and you got your answer. Let us see the effects if a partnership firm is not registered. Section 69 of the Indian Partnership Act, 1932, deals with the effects of non-registration. It imposes significant limitations on an unregistered partnership firm and its partners regarding the enforcement of rights through legal proceedings:

1. Section 69(1)

 An unregistered partnership firm cannot file a suit in any court to enforce a right arising from a contract or conferred by the Act against a third party. 

2. Section 69(2)

 Partners of an unregistered firm cannot sue the firm or each other to enforce rights arising from the partnership agreement (e.g., disputes over profit shares, breaches, or management issues), except in cases related to the dissolution of the firm or settling accounts after dissolution.

3. Section 69(3)

The restrictions in sub-sections (1) and (2) also apply to claims for a set-off or other proceedings to enforce a right arising from a contract. 

Before we move to drafting, you need to know the components of a partnership deed, which will help you draft better. 

What are the key components of a partnership deed?

Key components will help you draft your partnership deed better, as you will be aware of what needs to be included. Let us examine these key components.

1. Details of the partners 

This shall be the name and address of each partner.

2. Name and address of the partnership firm 

The partnership business shall operate under a name, so it is necessary to mention the name under which it shall be operated and the address of the principal place of business. 

3.  Nature of business

You should also specifically mention the type of business the partners will carry out. 

4. Duration of partnership

You should mention the date the partnership shall commence and it shall continue until. Let me give an example: If the partnership is at will, in that case, there is no fixed time period for it to come to an end. 

5. Capital contribution 

You need to mention the money that each partner contributes to the business. 

6. Profit and loss sharing 

Your partnership deed should specifically mention the percentage or ratio in which the partners will share profits and losses.

7. Duties and responsibilities

You need to set out each partner’s duties and responsibilities toward the business. 

8. Withdrawals

You can specify that if it is mutually agreed between the partners to withdraw a certain amount from their capital account. You must know that the partners are not entitled to salaries or remuneration for acting the partnership business unless it is mutually agreed.

9. Interest on capital and loan 

You can also mention that the partners shall receive interest on their capital contribution. Also, if a loan is provided by any of the partners, it shall carry an interest rate as agreed between the partners.

10. Accounting and book keeping 

This pertains to maintaining and auditing the books of accounts and records annually. You could also mention the firm or an individual appointed who would be responsible for this. 

11. Admission of new partners 

You can add this clause for admitting new partners with the consent of the partners. However, the profit-sharing ratio shall be determined by a mutual agreement.

12. Retirement

You can set out the terms for how a partner can retire, such as giving three months notice. 

13. Dispute resolution

This shall include the following: If there is a dispute or difference, the parties could try to resolve the dispute amicably, and if not, they could opt for alternate resolution modes.

14. Dissolution of partnership 

Unless otherwise agreed, the partnership may be dissolved by mutual consent, expiry of the fixed term, insolvency, or death of a partner. You can refer to section 40-44 of the Indian Partnership Act, 1932.

15. Death or incapacity of a partner 

The partnership may be dissolved by mutual consent, expiry of the fixed term, insolvency, or death of a partner or unless otherwise agreed.

16. Miscellaneous clauses

You could also add a confidentiality clause to protect the partners from disclosing sensitive information. You can also add a clause for amendments, which means that if any modifications need to be made to the deed at a future date, it can be done with the partners’ consent. 

Now that you know the components, let us draft the partnership deed. 

I will teach you to draft using example of Naresh uncle, who wanted to start business of all types of sweets, farsans, milk products, food products, non alcoholic drinks, food stuffs, food provisions, all types of bakery products, dry fruits, chocolates etc. He wanted to add his wife Lata Naresh Kumar, son Chirag Naresh Kumar and daughter in law Harshada Chirag Kumar to the partnership. 

Are you ready? 

How to draft a partnership deed? 

Explanation: The opening sentence describes the nature of the document being made and also mentions when and where the deed is being made and executed between the partners. This also introduces the partners to the deed. Along with the names, you must also mention their address. 

This DEED OF PARTNERSHIP made at Bombay this 31st day of March 2025 made between:
(1) NARESH HIREN KUMAR of Bombay Indian Inhabitant residing at Flat No.1703, A-Wing, Shree Naman Towers, S.V.P.Road, Near Flyover Bridge, Mira Road, Mumbai-401107 hereinafter referred to as “THE PARTY OF THE FIRST PART”,
(2) LATA NARESH KUMAR of Bombay Indian Inhabitant residing at Flat  Flat No.1703, A-Wing, Shree Naman Towers, S.V.P.Road, Near Flyover Bridge, Mira Road, Mumbai-401107 hereinafter referred to as “THE PARTY OF THE SECOND PART”, AND
(3) HARSHADA CHIRAG KUMAR of Bombay Indian Inhabitant residing at  Flat No.1703, A-Wing, Shree Naman Towers, S.V.P.Road, Near Flyover Bridge, Mira Road, Mumbai-401107 hereinafter referred to as “THE PARTY OF THE THIRD PART”, AND
(4) CHIRAG NARESH KUMAR of Bombay Indian Inhabitant residing at  Flat No.1703, A-Wing, Shree Naman Towers, S.V.P.Road, Near Flyover Bridge, Mira Road, Mumbai-401107 hereinafter referred to as “THE PARTY OF THE FOURTH PART”.

Explanation: You then start writing what is known as recitals. They begin with “Whereas”, and it sets out the intention of the partners to jointly carry on the business of partnership. You can give details of the type of business that the partners intend to start and can also mention the name under which the business will be carried on by the partners, along with the address at which such business will be carried on. 

WHEREAS PARTIES OF FIRST, SECOND, THIRD and FOURTH PART are desirous of carrying on the business of resellers and dealers in all  types of sweets, farsans, milk products, food products, non-alcoholic drinks, food stuffs, food provisions, all types of bakery products, dry fruits, chocolates etc and such allied lines, and
general merchant and commission agents etc (hereinafter referred to as “the said business”) in partnership in the name and style of “M/s.Kumar Sweet Farsan & Biscuit Centre” as partners thereof at Shop Nos.3 and 4, Sujat Mansion, S. V.P.Road, Mira Road, Mumbai-401107 (hereinafter referred to as “the shop premises”)

AND WHEREAS the parties hereto hereby are desirous of recording terms and conditions of the new partnership to be carried on in the name and style of “M/s.Kumar Sweet Farsan & Biscuit Centre”. 

Explanation: This marks the beginning of the operative clauses of the deed between the partners. It shows the intent of the partners to be bound by the subsequent terms and conditions outlined in the deed. These clauses form the integral part of the deed, which include terms such as share in the business, commencement date, capital contribution etc. 

NOW THIS INDENTURE WITNESSETH AND IT IS HEREBY DECLARED AND RECORDED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:-

Explanation: This clause gives the business a recognisable identity as it establishes the brand under which the business shall operate and also allows the flexibility to rebrand or operate under different names if needed and as would be mutually decided between the partners. 

1]   Firm Name

The partnership business shall be carried on in the firm name and style of “M/s.Kumar Sweet Farsan & Biscuit Centre” and/or in such other name or names as may be mutually agreed upon amongst the partners from time to time. 

Explanation: In this clause, you shall specify the address at which the business shall be carried on and mention whether the address at which the business will be carried on shall be of ownership or tenancy in nature. If you want, you can even mention how the partnership will carry on the business at the said premises after the death of the tenant partner. I am not dealing with the same, since there was already an understanding between the parties with regard to the same.

2]   Place of Business

The business of partnership shall be carried on at Shop Nos.3 and 4, Sujat Mansion, S.V.P.Road, Mira Road, Mumbai- 401107, which premises are the tenanted premises, the tenancy of which stands in the name of “Naresh Hiren Kumar” i.e. PARTY OF THE FIRST PART and this Deed of Partnership expressly stipulates that no right, title, interest or claim of any nature whatsoever is created in favour of any of the three other partners and the said tenancy rights exclusively shall belong to the PARTY OF THE FIRST PART only namely Naresh Hiren Kumar who is the tenant of the shop premises.
For the sake of clarification, it is also hereby recorded that as far as the said tenancy rights of the shop premises are concerned after the death of the said Naresh Hiren Kumar (one of the partners who is the tenant of the shop premises) the said tenancy will be dealt with as per and in accordance with the Maharashtra Rent Control Act 1999. The said business shall also be carried on at such other place or places as the parties may mutually agree upon from time to time.

Explanation: This clause mentions the start date or the day on which the business shall commence. 

3]   Commencement

The business of partnership shall commence on and from 1^st April 2025.

Explanation: This clause provides details about the nature of the business, so it basically sets out what business the partners will be carrying on precisely. 

4]   Business

The business of partnership shall be that of reselling and dealing in all types of sweets, farsans, milk products, food products, non-alcoholic drinks, food stuffs, food provisions, all types of bakery products, dry fruits, chocolates etc. and such allied lines and general merchant and commission agents and/or such other business or business as may be mutually agreed upon between the partners from time to time. The partners shall carry on the business after obtaining the necessary license and permission as required under law.

Explanation: This clause lays down the amount the business partners will contribute to the business, leaving room for the partners to decide who will contribute how much. 

5]   Capital

The capital required for the partnership business shall be brought in and contributed by the parties hereto in such a proportion as may be mutually agreed upon amongst them from time to time. Such capital contributed by each of the partners shall be credited to their respective capital accounts. The initial capital shall be Rs. 5,00,000/-.
Explanation: This clause defines the share in the profits and losses of the business. It shall contain the ratio or the percentage of profit or loss that the partners shall share. This percentage or ratio shall be mutually decided by the partners. 

6]   Share

The net profits and/or losses of partnership business after the payment of all expenses, remuneration to working partners, interest to partners and other outgoings, including capital losses, if any, shall be shared by and between the partners in the following proportions.

Sr. No.	ParticularsANK	Share
a)	Naresh Hiren Kumar [PARTY OF THE FIRST PART]	5%
b)	Lata Naresh Kumar [PARTY OF THE SECOND PART]	35%
c)	Harshada Chirag Kumar [PARTY OF THE THIRD PART]	30%
d)	Chirag Naresh Kumar [PARTY OF THE FOURTH PART]	30%

Provided, however, that subject to what is stated in clause (2) above, the tenancy rights of the shop premises shall not be included in the assets of the firm and the said tenancy rights shall continue to belong to the Party of the First Part exclusively.

Explanation: This clause concerns additional finance if needed by the partners to run the business over and above the capital contributed by the partners to the business. The partners shall mutually decide and agree on the mode of raising additional capital. 

7]   In case if the partnership firm is in need of further finances, the parties hereto may contribute the same as may be mutually agreed upon amongst the partners from time to time and the said amount will be credited to the respective capital accounts of the partners.

If the partnership firm is in need of any further finances, the parties hereto may make such arrangements as they may think proper and shall also be entitled to borrow money as loan or to receive deposit or advances with or without interest on such terms and conditions as may be mutually agreed upon amongst the partners from time to time.  

Explanation: This clause provides for interest that the partners shall receive on their capital contribution. Also, if a loan is provided by any of the partners, it shall carry an interest rate as would be agreed between the partners.

8]   Interest

It is specifically agreed upon amongst the partners that each partner shall be entitled to simple interest @ 12% per annum on amount standing to the credit to capital, deposit, loan, advances accounts of the partners. The said rate of interest can be changed (increased and/or reduced) and/or interest can be waived within allowable limit under Income Tax Act 1961 as may be mutually agreed upon amongst the partners.

Explanation: This clause concerns a mutually agreed upon amount that the partners may withdraw from their respective accounts on monthly basis. 

9]   Withdrawals

The partners shall be entitled to monthly withdrawals out of their capital accounts of such an amount as may be convenient and agreed upon amongst the partners and such withdrawals by each of the above partners, shall be debited to their respective accounts.

Explanation: This clause concerns the bank account that the partners shall open in the name of the business and it sets out whether the account shall be jointly or severally operated by the partners. The partners may mutually agree on the type of account to be opened and also authorize such partners to manage the account for better business functioning. 

10] Bank Account

The bank account or accounts shall be opened in the firm name in any bank or banks and shall be operated either jointly or severally by any one or more of the partners as they may be mutually agreed upon from time to time. The partners may open a current deposit and /or overdraft account to take loan and/or pledge goods and open letter of credit, etc.
The partners may mutually decide and agree to authorize such other person or persons to operate the said accounts for the convenience and facilities of the business operations.

Explanation: This clause concerns the regular accounting that the partners shall maintain. Such books of account shall be kept at the place of business or wherever the partners mutually agree. At the end of the accounting year, profits and losses shall be ascertained. 

11] Accounts

a)   The partnership firm shall maintain regular books of accounts and shall post all the entries that are required to be posted therein. These books of accounts shall be kept at the place of business of the partnership firm or at such other place or places as may be mutually agreed upon amongst the partners from time to time.

b)   The books of accounts of the partnership firm shall be closed on 31st March each year. The accounting year of the partnership shall be from 1^st April to 31^st March each year during the continuance of this partnership. At the end of the accounting year, the profit and losses of the partnership business shall be ascertained and dealt with as per the accounting principles.

Explanation: This clause concerns the duration of the partnership business. When the partners have not agreed on a specific duration for the partnership, it is referred to as a partnership at will. It is a partnership without any fixed term. So, if the partnership is formed for a specific purpose, then the same shall end on completion of that work or on expiry of the specified period, so in that case you need to specifically mention that. 

12] Duration

The Partnership hereby constituted is a partnership AT WILL.

Explanation: This clause ensures continuity of the business in case a partner leaves or passes away. It also provides for the manner in which the partners can retire from the business.

13] Retirement

 a)  Any partner may retire from this partnership by giving three months’ notice in writing to other partners of his/her intention to retire and on expiry of the said period of such notice, the partnership shall stand determined, so far as concerns the partner giving the notice.

b)   Retirement of any partner, either due to death, insolvency or for any other reasons whatsoever, shall not dissolve the partnership firm as to the surviving or continuing partners who shall be entitled to continue the business of the partnership.

c)   In the event of any partner retiring from the partnership firm and/or in the event of his death, he/she or his or her heirs in the event of death shall be paid over the balance standing to his /her credit as on the date of retirement including the profits determined up to the date of his/her retirement, as also his/her share in the goodwill of the firm (if any). Likewise, he shall forthwith pay to the firm any balance standing to the debit of his/her account, if any, as also his/her share in the losses of the partnership business determined up to the date of retirement. The net amount payable to the retiring partner or his/her legal heirs or receivable from the said partner or his/her legal heirs may be paid or received by instalments as may be mutually agreed upon amongst the continuing partners and the retiring partners or his/her legal heirs.

Explanation: This clause ensures fair valuation of the business and of intangible assets like brand image and that it shall belong to the partners. 

14] Goodwill

Goodwill, trade name and other rights of the partnership business (except the tenancy rights) shall belong to and be owned by the partners hereto in proportion of the profit sharing ratio.

Explanation: This clause prevents one or more partners from putting the partnership property at risk or causing any other partner to suffer for the acts done by that partner. It specifically sets out that the partners shall seek written consent from other partners before making any decision.  

15] No partner shall without the written consent of other partners:-

a)   Enter into any bond or become bail or surety or security with any person or persons or do or knowingly cause or suffer to be done anything whereby the partnership property or any part thereof may be seized, attached or taken in execution.

b)   Compromise or compound or except upon payment thereof in full release or discharge any debts due to the partnership firm. 

Explanation: This clause sets out the duty of the partners that is to be honest and faithful in their daily dealings.

16] Each partner shall

a)   Be just and faithful to each other in all transactions relating to the partnership.

b)   At all times, give to the other or others just and faithful account of the same, and also upon reasonable request furnish a full correct and direct explanation thereof to the other.

Explanation: This clause is regarding the partners to settle their personal debts if any to ensure that the other partners or the business is not affected due to their such act.

17] Each partner shall at all times duly and punctually pay and discharge his/her separate or private debts and engagement whether present or future and keep indemnified therefrom and from all actions, proceedings, costs, claims and demands in respect thereof, the partnership property and other partners or partners and their or his/her estates and effects. 

Explanation: This clause sets out the duty that no partners shall do any other business in the firm’s name, and if such an act is done, then that partner alone shall be held liable. It is to prevent the misuse of the goodwill of the business and to prevent the business from any financial loss.

18] No partner shall carry on in the name of a partnership firm any business other than the business of the partnership. If the partner has done any other business, he/she alone shall bear the consequences of such business.
The partnership firm will be in no way responsible for the liabilities or debts of such a business and such a partner will duly discharge and pay all his/her liabilities and debts in connection with the said partners and will keep indemnified this partnership firm and the partners from all actions, claims and demands in respect thereof. 

Explanation: This clause will come to the rescue when there are differences or disputes among the partners. The partners may first try settling by mutual discussions, and if that fails, an arbitrator may be appointed. Arbitration is like an out-of-court settlement method. 

19] Resolution of disputes amongst partners

Any differences or disputes whatsoever which shall either during the partnership or after the termination thereof arise between the partners or their respective representatives of the other partner or partners touching these presents or the constructions or application thereof or any clause or things herein contained or any account, valuations, divisions, debts or liabilities to be made hereunder or as to any act, deed or omission of any partner or as to any other matter in any way relating to the partnership business of the affairs or the rights, duties, liabilities of any persons under these presents shall be resolved amongst the parties hereto who are family members by mutual discussion, understanding and consent and if necessary with the help and guidance of the well wishers within 15 days, failing which the the parties shall be entitled to refer the dispute to a sole arbitrator appointed by mutual consent or by a competent court as per section 11 of the Arbitration and Conciliation Act,1996. The place of arbitration shall be Mumbai and the arbitration shall be conducted in English language with costs of the arbitration to be borne by the parties equally.

Explanation: This clause allows the partners to make changes and add other terms at a future date with the mutual consent of the partners. 

20] Notwithstanding anything stated or provided herein, the partners shall have full powers and discretion to modify, alter or vary the terms and conditions of this partnership deed in any manner whatsoever they think fit and proper by mutual consent.

Explanation: This signifies that the partners to the deed have acknowledged and accepted the terms by signing this deed.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and the year first hereinabove written.

This was easy right?

Once you know the basic and the key components of the deed then you can quickly draft one. Learning this skill will increase your revenue as you will have something new to offer and this is not as complicated as it may seem. 

Conclusion

So now you have understood that a partnership deed is a vital document. Trust me, this is not as boring as it might sound. You need to be clear with the concepts and what you need to incorporate in your deed and then you are good to go. You need to know that a well drafted partnership deed forms the foundation of your business. Whether you are starting a sweet shop or some other business, it is better to take time to draft a comprehensive deed tailored to suit the needs.