Partnership Deed admin June 9, 2023
Understanding Partnerships and the Process of Drafting and Registering a Partnership Deed

Partnerships are a common form of business structure where two or more individuals or entities come together to conduct a business venture. It involves a mutual agreement to share profits, losses, and responsibilities.

Essential Documents Required:
  • Choosing an Suitable Name
  • Up to 20 Partners Allowed
  • Minimum 2 Members Needed as Partners
  • Registered Business Address
  • Bank Account and PAN Card for the Partnership
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A detailed analysis of your case will be done by an experienced lawyer.
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How Y/our Lawyer helps in Efficient Partnership Deed and Registration Services ?

Our consultant will discuss the issue over a 24X7 helpline .
Step 1

Our consultant will discuss the issue over a 24X7 helpline .
Step 1

A detailed analysis of your case will be done by an experienced lawyer.
Step 2

You will be able to track your case with a personal account
Step 3

Overview

A partnership deed serves the crucial purpose of defining the roles and responsibilities of partners, ensuring smooth operations within the firm. It becomes particularly valuable when collaborative efforts among partners yield results.

This document holds immense importance and can even serve as a legal instrument if the firm finds itself in a courtroom. Since the Partnership Deed, also known as Partnership Agreement, is registered under the Indian Registration Act 1908, the risk of the document being destroyed while in the possession of the partners is eliminated.

Furthermore, registering the partnership deed offers several advantages, including eligibility for a PAN (Permanent Account Number), facilitating the opening of a bank account in the firm’s name, and assisting with GST registration or obtaining an FSSAI license in the organization’s name.

Classification of Partnership Firms

  1. General Partnership: This is the most common type of partnership where all partners have unlimited liability, equal rights, and share profits, losses, and management responsibilities.

  2. Limited Partnership (LP): In a limited partnership, there are two types of partners: general partners and limited partners. General partners have unlimited liability and manage the business, while limited partners have limited liability but do not participate in management.

  3. Limited Liability Partnership (LLP): LLP is a relatively newer form of partnership where all partners have limited liability, protecting their personal assets from business debts. LLPs also provide flexibility in terms of management and are governed by specific LLP laws.

  4. Joint Venture (JV): Joint ventures are formed for a specific project or purpose where two or more businesses collaborate and pool resources to achieve a common goal. Joint ventures can be structured as partnerships, with shared risks, responsibilities, and profits.

  5. Silent Partnership: In a silent partnership, one or more partners contribute capital but do not actively participate in the business’s management or operations. They share in the profits and losses but have limited liability.

  6. Sleeping Partnership: Similar to a silent partnership, a sleeping partnership is where a partner invests capital but does not have an active role in the business. They share in the profits and losses and may have limited liability.

Procedural Guidelines for Partnership Deed Registration

Components of a Partnership Deed

  • Firm Name
  • Partner Information
  • Nature of the Business
  • Duration of Partnership
  • Capital Contribution
  • Drawings
  • Interest on Capital and Drawings
  • Rights and Powers
  • Responsibilities
  • Remuneration
  • Goodwill
  • Profit and Loss Sharing

Inclusions in a Partnership Deed

  • Firm Name
  • Partner Information
  • Commencement and Duration
  • Capital Contribution
  • Profit-Sharing Ratio
  • Rights, Liabilities, and Authority
  • Partner’s Compensation
  • Admission and Retirement of Partners
  • Goodwill Evaluation
  • Dispute Resolution
  • Bankruptcy of a Partner
  • Liquidation Process
Process

  1. The Process of Registering a Partnership Deed: While not mandatory, it is advisable to register a partnership deed as it helps establish the rights, responsibilities, and obligations of each partner. Under the Indian Partnership Act of 1932, there is no specific time limit for registering a partnership firm. The registration can take place at the time of formation or even after the business has commenced, subject to the agreement of all partners. The step-by-step procedure involves:

    1. Submitting a Form A application to the Registrar of Firms, providing all relevant details about the business.
    2. Furnishing a signed copy of the agreement that outlines the rules and regulations governing the partnership.
    3. Payment of the required affidavit fee, stamp duty, and any other applicable fees.
    4. Upon approval of the registration application by the registrar, the firm name is entered into the government records, and the partners can obtain the incorporation certificate.