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About this template
What is this template?
This document is a formal partnership deed that structures a business entity with four parties. It is not a limited liability partnership agreement, but a traditional partnership at will under the Indian Partnership Act. It contains specific tax-compliance clauses for partner remuneration proportions and a liability shield for dormant partners against criminal actions.
When should you use it?
Use this deed when starting a general partnership in India where some partners will manage daily operations and others will only provide financing. If you require limited liability for all partners, use an LLP Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 4 | Interest on Capital | Partners receive interest on their capital at a rate of ____ per annum or as prescribed by section 40(b)(iv) of the Income-tax Act. |
| 5 | Working Partners and Remuneration | Working partners receive remuneration computed according to section 40(b)(v) of the Income-tax Act, distributed in specific percentage proportions. |
| 8 | Partnership at Will | The document defines the duration of the partnership as a partnership at will, allowing for flexible termination. |
| 9 | Profit and Loss Sharing | Net profits and capital losses are divided among the four parties according to the specific percentages listed in the sharing table. |
| 12 | Death of a Partner | The firm continues as a going concern with surviving partners and legal heirs rather than dissolving upon a partner's death. |
| 17 | Financing and Dormant Partners | Dormant partners are exempt from day-to-day management responsibilities and are expressly indemnified against criminal liabilities of the firm. |
| 19 | Arbitration | All disputes arising between partners or their legal representatives are referred to arbitration under the Arbitration and Conciliation Act, 1996. |
Who it's for
- individuals forming a partnership at will in India with distinct working and dormant partner roles
- partners seeking to align remuneration and interest payments with section 40(b) of the Income-tax Act, 1961
- a business entity transitioning from an oral agreement to a written deed for tax assessment purposes
- partners wishing to ensure business continuity through legal heirs in the event of a member's death
How long it runs and how it's signed
Law it's drafted under
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