Definition as per Act
THE INDIAN PARTNERSHIP ACT‘ 1932 Section.4 of the Indian Partnership Act, 1932 defines Partnership in the following terms: “ Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
Partnership Deed
Partnership Deed is a written agreement among the partners specifying rules and regulations and is signed by all the partners and stamped as per the Stamp Act with an aim to prevent possible disputes & disagreements among the partners at a future date. The registration of Deed of Partnership is made under the Indian Registration Act, 1908.
Details Required in a Partnership Deed :
General Details:
>> Name and address of the firm and all the partners
>> Nature of business
>> Date of starting of business
>> Capital to be contributed by each partner
Profit/loss sharing ratio among the partner
Specific Details :
>> Interest on capital invested, drawings by partners or any loans provided by partners to firm
>> Salaries, commissions or any other amount to be payable to partners
>> Rights of each partner, including additional rights to be enjoyed by the active partners
>> Duties and obligations of all partners
>> Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
>> Other clauses as partners may decide by mutual discussion
Procedure for Creating & Registering Partnership Deed
>> Partnership deed must be made on stamp paper as per the laws of the place of signing. After preparation of the deed, it must be signed by all the partners.
>> Visit the nearest District Sub-Registrar and register the Deed.
>> Registrar will verify details of partners and check the stamp duty (Registered documents shall have stamp duties as notified by State Governments)
>> Once Registrar is satisfied with documents and validity of agreements, Registrar will register the Partnership Deed.
>> Partnerships in India are governed by the Indian Partnership Act, 1932. The Partners may or may not register their partnership agreement . However , in case the partnership deed Is not registered , they may not be able to enjoy the benefits which are registered partnership firm enjoys.
Benefits of Partnership Registration
Power to file case in a Court by a partner against the firm or other co-partners
Power to file case in Court by firm against 3rd parties
Power to claim set-off