Adam Frankel
General Counsel · Technology & AI
15+ years as General Counsel to technology, cloud & AI companies
Partnership Agreement (India) by OLL
Open Legal LibraryUpdated 19 Oct 2026
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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.
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
How long
Runs until someone ends it
Survives the end
Arbitration
Signed by
First Party, Second Party, Third Party, Fourth Party
Witness
Required
Notarisation
Not required
Also needed
printed on proper stamp paper; filed with the Registrar of Firms
Law it's drafted under
Refers to
Income-tax Act 1961
Governed by
Indian Partnership Act
Refers to
Arbitration and Conciliation Act 1996
Refers to
Customs Act
Refers to
Foreign Exchange Regulation Act
Governed by
Indian Stamp Act
Categories
Jurisdiction
India
Document info
MS Word. Document created on Fri Jul 17th, 2026. Last updated on Mon Oct 19th, 2026.
This document is public
Licensed under CC BY 4.0 (Attribution).
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