Partnership Agreement (India) by OLL
Prefer the original wording?
PARTNERSHIP AGREEMENT
This is a preview. The full template is free on GitLaw.
This is a standard template for a Deed of Partnership in India, designed to establish or amend a partnership business involving multiple individuals. It covers essential aspects including capital investment, profit and loss distribution, interest on capital, and remuneration for working partners according to Indian income tax laws. The template also includes provisions for dispute resolution through arbitration and clarifies the roles of active versus dormant partners.
5.0 out of 5 on Google
Read reviewsAs seen in
About this template
What is this template?
This is a formal deed of partnership governed by the Indian Partnership Act 1932 that specifically addresses tax-deductible remuneration for working partners. It is not a limited liability partnership (LLP) agreement; it creates a traditional partnership where partners have shared liability.
When should you use it?
Use this document when starting a multi-partner business in India or updating an oral agreement to comply with Income-tax Act requirements. If you intend to limit personal liability for business debts, use an LLP Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 3 | Capital Investment | Defines amounts lying to the credit of partners as of a specified date as their capital investment. |
| 4 | Interest on Capital | Obliges the firm to pay interest on partner credits at the rate prescribed under section 40(b)(iv) of the Income-tax Act 1961. |
| 5 | Working Partners and Remuneration | Identifies active partners entitled to remuneration computed under section 40(b)(v) of the Income-tax Act 1961. |
| 8 | Partnership at Will | Establishes that the partnership duration is at will, meaning any partner may terminate the relationship at any time. |
| 9 | Profit and Loss Sharing | Specifies the percentage-based distribution of net profits and capital losses among the four named party roles. |
| 12 | Continuance Notwithstanding Death | Prevents dissolution upon a partner's death, allowing surviving partners and legal heirs to continue the business concern. |
| 16 | Execution of Securities | Requires all partners to jointly sign bills of exchange and promissory notes to bind the partnership firm. |
| 17 | Dormant Partners | Exempts financing partners from day-to-day management and limits their liability for criminal actions under the Customs Act. |
| 19 | Arbitration | Requires all disputes to be referred to an arbitrator under the Arbitration and Conciliation Act 1996. |
Who it's for
- Indian business partners seeking to align their deed with Finance Act 1992 assessment procedures
- firms requiring a mix of active working partners and dormant financing partners
- partnerships wanting to continue business operations after the death of a partner
- business owners in India needing to deduct partner remuneration under section 40(b)(v)
How long it runs and how it's signed
Law it's drafted under
Frequently asked questions
A template isn't binding on its own - like any contract, it becomes binding once it's properly completed and signed. Templates in our curated library are professionally drafted for US or UK law; review any template before you sign it.
Yes. Chat with GitLaw to edit any section, or make changes directly in the editor.
Yes, read about team plans here.
Describe what you need in the chat and GitLaw will draft it for you.
Templates in our curated library are professionally drafted for US or UK law. The wider library comes from the GitLaw community and public sources - a solid starting point, but check any template fits your situation before you rely on it.
Mostly US and UK law. Some templates use general commercial terms that work across jurisdictions, and many note which law they're written for.
It depends on the situation. Templates work well for routine business agreements. For anything involving significant money, complex IP, employment, or areas you're unsure about, it's worth getting professional advice before you sign. GitLaw provides templates and tools, not legal advice.
Open any template in GitLaw and describe the change you want in the chat — 'make clause 4 mutual' or 'add a 30-day notice period', for example. GitLaw drafts the revised language and shows it as a suggested edit. You accept, reject, or keep editing from there.
Yes. Upload a Word, PDF, or Markdown file and GitLaw will open it in the editor. You can review, edit, or chat with GitLaw about it the same way you would with any template from the library.
Trusted by 5,000+ businesses
From template to signed, in one place
Every template opens in an editor with an AI agent alongside it.
Open
Pick a template and open it. Nothing to download, and no credit card to start.
Free to open
Edit with AI
Describe your situation in chat and the agent adapts the wording, clause by clause.
Tracked changes you can review
Send and sign
Share it for negotiation, then collect signatures without leaving GitLaw.
eSign included
Built for your legal work,
with practicing lawyers
Trained on 5,500+ clauses and specialist areas of law. Built with a standards committee of independent lawyers.
As seen in
Ready to get started?
No sales calls, no credit card. Just chat with GitLaw.
GitLaw provides templates and tools, not legal advice. Templates are a starting point, not a substitute for advice on your situation - for anything significant, speak to a qualified lawyer.