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A partnership deed, alternatively referred to as a partnership agreement or contract, constitutes a legally binding document that delineates the rights, responsibilities, and obligations of partners within an Indian partnership firm.
This written instrument formalizes the terms and conditions agreed upon by the partners, thereby establishing the foundational structure for their business relationship.
To ensure the partnership deed accurately reflects their specific needs and adheres to relevant Indian legal and regulatory frameworks, it is advisable for partners to engage the expertise of a qualified chartered accountant, such as those at SURETAX BIZCARE, during the drafting process.
Under the Indian Partnership Act, 1932, a partnership can be established through either an oral or a written agreement among the partners. A partnership deed if executed, must be on non-judicial stamp paper and may be either notarized by a Public Notary or registered with the relevant Registrar of Firms.
The partnership deed commences by specifying the name and address of the partnership firm, followed by the full names and addresses of each partner.
The partnership deed delineates the scope of business or activities the partnership intends to conduct.
A partnership firm’s duration can be for a fixed term, a specific project, or at will.
Capital contribution in a partnership firm refers to the resources (typically monetary, but can include assets) invested by each partner into the business.
The partnership firm’s profit and loss are shared among partners according to their agreed ratio in the partnership deed; if no ratio is specified, it’s shared equally.
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