What is Partnership Deed?
A partnership deed is a legal document in a written format called the partnership deed format that contains an agreement between two persons who want to undertake business together and share the profit and losses when registering a business as a partnership firm.
You can also call it a partnership agreement. In this, two persons agree to share profits and losses in a defined manner to begin a new business and sign and stamp the document.
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What is present in the Partnership Deed
The importance of partnership deeds comes into notice as it:
- Defines the terms and conditions of partnership among the partners
- Eliminates any possible litigation and disputes among the partners
- Offers guidelines for all future business activities
- Helps streamline the needs among its partners regarding the different policies governing their partnership
Contents of the Partnership Deed
The contents of the partnership deed are placed in a partnership deed format as listed below:
- Name of the partnership firm
- Period of partnership
- Nature of business of the firm
- Capital contribution
- Partner’s drawings from the company
- Salary and commission
- Profit/loss sharing
- Accounts and audit
- Loan of the partner
- Obligations of the partners, including the duties
- Start date, end date/demise date of the partner
Partnership Deed Registration Process
As per the Indian Partnership Act 1932, the partnership deed registration has no time limit meaning you can register a company on the date of its incorporation or any date after duly paying the fees and penalty (if any).
The stepwise process for the registration is listed below.
Application to the Registrar of Firms in Form A
This provision is also available online. The application should include the following data according to the partnership deed format :
- Name and address of all partners
- Name of the partnership firm
- Duration of the partnership
- Location of business
- Date of partner’s joining
- Duration of the partnership
- Date of business commencement
Filing the Copy
The partners should sign the agreement, including a list of all the rules and regulations. Later they should register it with the registrar.
Payment
Make payment for stamp duties and other essential fees.
Incorporation Certificate Collection
Once the registrar approves the application and enters the company name into the records, the partners can collect the incorporation certificate and claim that their company is legally authorised.
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How do you write a partnership deed?
A partnership deed includes the following information according to the partnership deed format:
- Name and address of the firm and partners.
- Nature of business carried out by the firm.
- Date of commencement of business.
- The Partnership Duration
- Capital contribution by each partner.
- Profit sharing ratio among partners.
What are the benefits of a partnership deed?
A partnership deed can help with:
- The regulation of the partners’ liabilities, rights, and duties.
- Misunderstandings avoidance between partners by outlining all terms and conditions in advance.
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