Partnership Deed Template (India) — Free Format
A partnership deed is the written agreement between partners of a firm under the Indian Partnership Act, 1932, covering capital, profit sharing, duties, drawings, admission and retirement of partners, and dissolution. It is needed to register the firm and to open a bank account.
Stamp, registration and e-sign at a glance
The three things to settle before anyone signs this agreement in India.
Payable under the stamp law of the state where it is signed; rates vary by state. Unstamped, it cannot be used as evidence until duty and penalty are paid. Partnership instruments usually attract duty linked to the capital contributed.
Check your state's rateRegistration with the Registrar of Firms is optional but strongly recommended.
A partnership deed can generally be e-signed, but state Registrars of Firms may require physically signed or notarised copies. Check your state before signing electronically.
What cannot be e-signedWhat is a Partnership Deed?
Where the deed is silent, the Partnership Act applies default rules — for example, equal profit sharing and no salary for partners. A deed lets partners set their own rules and avoid disputes.
When to use it
- Starting a partnership firm
- Admitting or retiring a partner (with a supplementary deed)
- Registering the firm with the Registrar of Firms
Key clauses checklist
Make sure your draft covers each of these. Linked clauses open a sample wording with drafting tips.
- Capital contribution and profit sharing
- Partners' remuneration and interest on capital
- Banking and authority
- Admission, retirement and death of a partner
- Dispute resolution Sample clause
- Dissolution Sample clause
Indian law notes
Registration of the firm
Registration under Section 58 of the Partnership Act is optional but important: under Section 69, an unregistered firm cannot sue third parties to enforce contract rights.
Partner remuneration and tax
The Income-tax Act allows a firm to deduct partners' salary and interest on capital only within limits and only if authorised by the deed. Draft these clauses with your tax adviser.
PARTNERSHIP DEED This Deed of Partnership is made at [City] on [Date] between: 1. [Partner 1 Name], aged [Age], residing at [Address] (the "First Partner"); and 2. [Partner 2 Name], aged [Age], residing at [Address] (the "Second Partner"). WHEREAS the parties have agreed to carry on business in partnership on the terms below. 1. NAME AND BUSINESS The firm shall carry on the business of [nature of business] under the name [Firm Name] at [Principal Place of Business], and at other places the partners agree. 2. COMMENCEMENT AND DURATION The partnership starts on [Date] and is at will. 3. CAPITAL The initial capital is Rs. [Amount], contributed as follows: First Partner Rs. [ ], Second Partner Rs. [ ]. Further capital shall be contributed as the partners agree. 4. PROFIT AND LOSS Net profits and losses shall be shared in the ratio [50:50], after partners' remuneration and interest on capital. 5. INTEREST AND REMUNERATION 5.1 Interest on capital at [12]% per year, or the rate permitted under the Income-tax Act, whichever is lower. 5.2 Working partners shall receive remuneration within the limits allowed under the Income-tax Act, as decided by the partners each year. 6. BANKING The firm's bank accounts shall be operated by [any one / jointly by both] partners. 7. DUTIES Each partner shall devote attention to the business, act in good faith, keep accurate accounts and not carry on a competing business without consent. 8. BOOKS OF ACCOUNT Books shall be kept at the principal place of business and closed on 31 March each year. 9. ADMISSION AND RETIREMENT A new partner may be admitted with the consent of all partners. A partner may retire by giving [3] months' written notice. A retiring partner's capital and share of profits shall be paid within [6] months. 10. DEATH OR INSOLVENCY The death or insolvency of a partner shall not dissolve the firm; the remaining partners may continue it, and the legal heirs shall be paid the deceased partner's dues. 11. DISSOLUTION The firm may be dissolved by mutual consent or as provided in the Indian Partnership Act, 1932. 12. ARBITRATION Disputes among partners shall be referred to arbitration by a sole arbitrator under the Arbitration and Conciliation Act, 1996, seated at [City]. 13. GENERAL Matters not covered by this deed are governed by the Indian Partnership Act, 1932. First Partner: ____________ Second Partner: ____________ Witnesses: 1. ____________ 2. ____________
Replace every [placeholder] and delete options that do not apply.
How to execute it
From blank template to a signed, stamped and stored contract.
Agree capital, profit ratio and partner remuneration.
Pay stamp duty based on capital under state law.
Sign before two witnesses and notarise if your Registrar requires it.
Apply to the Registrar of Firms for registration.
Obtain the firm's PAN and open a bank account.
Frequently asked questions
Is registering a partnership firm compulsory?
No, but an unregistered firm cannot sue third parties to enforce contracts under Section 69 of the Partnership Act, so registration is strongly advised.
Can partners be paid a salary?
Yes, if the deed authorises it. The Income-tax Act limits how much is deductible.
What happens if there is no partnership deed?
The Partnership Act's default rules apply, such as equal profit sharing and no interest on capital or salary.
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