A Partnership Deed can be created using a ready-made template. There are several agreement templates that can be downloaded and edited to fit your requirements.
India is becoming increasingly popular as an entrepreneurial destination. Sole proprietorships and Partnerships are popular types of businesses in India. The regulatory requirements in these two cases are minimal. The business can be setup under these two forms quite easily. If you need more details on these forms, they are available for download right here!
Is it essential to have a partnership deed? Yes, its is essential to have a partnership deed. The partnership deed is a formal document that outlines the terms and conditions of agreement between partners in a firm. It helps to avoid any misunderstanding because all aspects are outlined beforehand, which provides clarity for everyone involved with the company.
Here, we discuss how a partnership can be setup in India.
Choosing a name for your Partnership firm
The first step is to choose an appropriate name for a partnership firm. The business name has to be unique; it should not in any way resemble an existing business’ name. Having similar names could not only lead to confusion, but it could also hurt the goodwill of the existing partnership firm.
The name should not include words which imply sanction or patronage of the Government of India. The State Government has to provide its consent in written if any such words have to be included as part of the name.
Creating a partnership deed
A partnership firm can be established only if there are two or more persons. A deed has to be executed; the partnership deed template is available for download right here! Feel free to browse the form and download and edit it to suit your requirements.
The partnership deed is a document which specifies the rights and obligations of the members of the partnership. In today’s times, a written partnership deed is needed for statutory and tax purposes.
The partnership deed will need the following information in the document
- Names of all members
- Addresses of all members
- Commencement date
- Details of Business
- Head office / Assets pertaining to partnership firm
- Partnership tenure
- Capital contributions by members
- Profit sharing ratio of members
These are the bare minimum details that are required, additional details may be included. Normally, these are the additional details included in a partnership deed.
- Interest to be paid on members’ capital contribution
- Interest to be charged on loans given to members
- Salaries or commissions to be paid to members
- Accounting methodology and auditory requirement
- Powers, responsibilities and obligations of each member
- Rules for admission of new partner
- Rules for Retirement and Death of existing partner
Statutory requirement for registration
The partnership deed is an agreement that should be executed on a stamp paper as stipulated in the Indian Stamp Act. It should be executed in as many copies as the number of members. Each member in the partnership should possess a copy. The copy should be registered with the registrar of firms in India.
Registration of partnership is options as per the Indian law. It is entirely the discretion of the partnership members whether they want to register the partnership or not. Partnership firms in India are governed under the Partnership Act, 1932.
Registration of the partnership firm can be done prior to the commencement of business or subsequently while the business is operational. The following documents are to be produced with the registrar of firms alongside the application –
- Form No. 1 is the Application of registration of partnership
- Specimen of Affidavit
- Original copy / copies of Partnership deed
- Proof of ownership, rental / lease agreement of partnership firm’s office
The application and affidavit has to be duly signed by all the partnership members. The registrar of the firm will issue a certificate of registration and will make an entry into the partnership firms register for registration of the business. This will be done only if the documents submitted are satisfactory.
For more details on the forms needed, look here and download the forms you need here.