DEED OF PARTNERSHIP
NOW THESE PRESENTS WITNESSETH :
1. The name and style of the Partnership Firm shall be___________________ and the registered office shall be at_____________________ or at any other place or places as the partners may mutually agree upon in future.
2. The Partnership shall be at Will.
3. The parties to these presents have become Partners, with effect from___________________________ by virtue of this Indenture.
4. The terms and conditions of this Deed shall take effect from___________.
5. The business of the firm is now that of_________________________.
6. The amount of Capital will be Rs_____ to be contributed b y the Partners herein ____ The Capital may be increased at any time by mutual consent of both the partners.
7. Any partner may with the consent of the other partner advance any amount of money as may be required for the necessity of the Firm by way of loan which may bear interest at the rate not more than eighteen percent (18%) per annum. Loans, may also be raised from external sources for the benefit of the Firm on such terms and conditions as the partners may mutually agree upon.
8. The Profits or Losses of the Firm as the case may be shall be divided between the Partners in the following manner :
9. The bank account or accounts may be opened in the name of the Firm with any bank or banks by the partners which they shall mutually agree upon. The partners may also apply to the bankers of the Firm for availing the financial assistance The bank account or accounts may be opened with other bank or banks which the partners shall mutually agree upon in future. The bank account or accounts will be operated under joint signatures of both the partners. Such arrangement may be changed and/or altered with the mutual consent of the Partners at any time.
10.The accounting year of the Firm will run from 1st day of April to the last day of March.
11.(A) The Partners will be entitled to get the payment of interest by the Firm on Capital standing at their respective credit and also on introduction of further Capital and/or loan paid by them to the Partnership Firm over and above their respective Capital at such rate as may be mutually decided by them from time to time provided that the rate of such interest shall not exceed 18% (Eighteen) per annum and such decision of the Partners may be taken verbally or in writing which will be deemed to be the part and parcel of the stipulations of this Deed. Any payment of such interest to the partners will be deemed to be expense of the Partnership business and will be debited to the Profit and Loss. Account to determine the profits or losses, as the case may be, of the Partnership Firm. After drawing up the final accounts of the Partnership business of the relevant year, the interest on Capital which will be determined to be payable to the partners, shall be credited to their respective accounts at the close of accounting period. (B) Both the Partners to these presents are actively engaged in conducting the affairs of business as working partners and in consideration thereof, they shall be entitled to get yearly remuneration (which term shall include the bonus and commission also) as under :
a. That the yearly remuneration payable to the Working Partners shall be computed/quantified in the manner of percentage on the Book Profit as defined u/s 40(b)(iv)(2), read with explanation 3 of the said section of the Income Tax Act, 1961 for each accounting period according to following ratio: Level of Book Profit Amount of yearly Remuneration
i. On the First Rs_ 75,000 of Rs_ 50,000 or at the rate 90% (Ninety the book profit or in case of percent) of the book profit whichever a loss is more.
ii. On the next Rs. 75,000 of at the rate 60% (Sixty percent). the book profit.
iii. On the balance of the book at the rate 40% (Forty percent) profit
b. That such amount of yearly remuneration shall be distributed between the Working Partners in the following proportion :
i. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
ii. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
iii. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Provided that the total remuneration payable to all partners as calculated above for the relevant accounting, period shall in no case exceed the maximum amount permissible as deduction per year to the Firm under the Income Tax Act, 1961. Such remuneration which will be determined to be payable to the Working Partners will be allowed as expenses deductible in computing the income or loss of the Partnership Firm, as the case may be, chargeable under the head. Profits and Gains of Business in terms of the provision of the Income Tax Act, 1961 which will be in force from time to time.
c. that for the purpose of above calculation the Book Profit means the net profit, as shown in the Profit and Loss Account for the relevant previous year, computed in the manner laid down in Chapter IVD of the Income Tax Act, 1961 as increased by the aggregate amount of the remuneration paid or payable to both the working partners of the Firm if such amount has been deducted while computing the net profit.
d. that for the purpose of this clause Working Partner means an individual who is actively engaged in conducting the affairs of the business of which he is partner.
e. that in case any of the partners to these presents fails to keep himself actively engaged in conducting the affairs the business of this Firm as Working Partner due any reason in any accounting year, such partner will not be entitled to get remuneration for such period. But the remaining partner shall be entitled to get remuneration only according to the manner mentioned in clause 11(B)(b) of this Indenture in consideration of his service rendered to the Firm.
f. that the remuneration payable to the Working Partner of the relevant year shall be credited to their respective accounts at the close of the accounting period when the final accounts of the Partnership business will be drawn up and the amount of remuneration due to them is determined.
g. that the partner herein shall be entitled to increase or reduce the quantum of remuneration and also agree to revise the mode of calculating the above remuneration if necessary in future.
h. That for the sake of convenience, the interest on capital and remuneration receivable by each partner, hereinafter shall be referred to as. Combined Sum.
12.The Partners may draw such sum or sums of money for their personal purpose from time to time from their Capital Accounts and after adjustment of such drawings of each partner with the combined sums (interest on Capital and Remuneration) receivable by him, the balance if any shall be transferred to the Capital Account or Current Account of the Partners. In case, if any amount is found to have been withdrawn by any Partner in excess over such combined sums, on the closing day of the accounting year the same will be treated as his withdrawal from his capital account. Similarly, in case any amount drawn by any Partner less than of such combined sum the same may be kept as liability of the Firm to the partners or may be deemed to be his introduction as Capital.
13.The books of accounts along with vouchers and other necessary papers, documents etc. as required under law shall be kept at the place, of business and will remain open to the partners for inspection and each partner or his agent will have the right and power to take copies of such accounts or documents at all reasonable time The Profit and Loss Account and Balance Sheet shall be drawn at least once in a year and the share of Profit as the case may be shall be adjusted with the Capital Accounts of the Partners.
14.The partners save as otherwise expressly provided in clause 12 of this Indenture, may draw sum or sums of money from time to time for their necessity as may be mutually agreed upon from their individual accounts which in no case shall exceed the amount standing in his credit. None of the partners shall without the consent in writing of other partners release or compound any debt owing to the Firm or diminish security without receiving the full amount thereof or lend any money or delivered the goods belonging to or otherwise than in usual course of business of the Firm or make any assignment or trust of his share or interest in the Firm or do or knowingly permit to be done anything whereby the property of the Firm may be exposed in execution. Any infringement of the terms stipulated above on the part of any partner shall enable the others to exclude the former from this partnership business.
15.The partners at any time may admit any other person or persons as Partner or Partners in the Firm on such terms and conditions as may be mutually agreed upon. In case of such reconstitution, interest on Capital and Remuneration receivable by the existing Partners up to the date prior to such reconstitution shall be credited to the Capital Accounts of the existing Partners, after deducting their drawings out of the aforesaid amount.
16.The Partnership shall not be dissolved on retirement, resignation, insolvency or physical incapacitation of any partner.
17.The Goodwill of the Firm will be ascertained at two years purchase of the average net profit of last three accounting years.
18.Any Partner may retire or resign from the Partnership by giving three months clear notice according to English Calendar, to the other partners in writing stating his intention of doing so, in such case, share of profit or loss of the Retiring Partner up to the date of his retirement or resignation shall be ascertained and after adjustment of his drawings and liabilities of his share in the Firm, the balance in Capital Account standing in his credit up to the date of his retirement or resignation as well as his share of Goodwill in the Firm, to be ascertained in the manner as described in clause 18 of this Indenture, shall be paid by the continuing partner within three months from the date of his retirement or resignation. The continuing partner will have the right to carry on the business as sole Proprietor or in Partnership with other person or persons as the case may be enjoying the Goodwill and Trade name.
19.In case of death of any partner, the partnership shall not be dissolved the legal heir of the partners named below shall step into the shoes of the deceased partner, if they so desire taking over the deceased partner share, interest, assets and liabilities in the Firm_ If the legal heir of the deceased partner do not express their willingness within two months from the date of receipt of Communication to be sent by the other partner to him within thirty days from the date of death of the deceased partner in such case it will be deemed that the legal heir is not willing to enter into Partnership with the other partner and the matter will be settled as in the case of Retiring Partner as stipulated in Clause
20.This Indenture. The other partner shall have the right to carry on the business in the manner he may like without any let or hindrance on the part of the legal heir of the deceased partner
a. In place of First Part :
b. In place of other Part :
21.None of the Partners shall sell or mortgage his share and interest in this business to any stranger. The Partnership may be dissolved with the consent of both the partners and the property and assets of the Firm shall be realised and the proceeds shall be applied for paying the outstanding Government dues, if any and liquidating the claims of the creditors including the loan advanced by the partner or partners together with interest. The surplus, if any shall be applied for repaying to the partner or partners, the amount of interest on Capital and Remuneration receivable by the Partners up to the date of dissolution. Thereafter the surplus shall be utilised to repay the balance standing in the Capital account of each partner and the further balance, if any, available shall be divided between the partners in proportion to their respective profit & loss sharing ratio.
22.Any dispute or difference which may arise amongst the partners with regard to the construction, meaning and effect of this Deed or any part thereof or the rights and liabilities of the partners in the Firm shall be referred to arbitration consisting to two Arbitrators, one to be appointed by each partner and in case of disagreement between the Arbitrators by an Umpire to be appointed by the Partners whose decision shall be final and binding upon the partners.
23.Both the partners herein are hereby individually empowered and authorised to sign all applications, contracts, tenders, documents, receipts, agreements, letters, negotiations etc. in respect of arbitrations licenses, registrations, tenders, orders etc. relating to this partnership business and also to appear and represent the Firm on behalf of the other partner before the Authorities which may be necessary from time to time. All acts, deeds and things lawfully done by any of the partners herein shall be deemed as acts, deeds and things done by the other partner and shall be binding upon him.
24.All notices required to be given to any Partner shall be deemed to have been served, if sent to such partner at the office of the Firm or at his residential address by registered post.
25.The above terms and conditions may be varied, altered, aborgated and new terms and conditions may be added from time to time with the consent of both the partners either verbally or in writing as the partners may think fit and proper.
26.In all matters not specifically covered by the aforesaid clauses the provisions of the Indian Partnership Act, 1932 shall apply.
IN WITNESS WHEREOF the parties to these presents do hereby set and subscribe their respective hands on the day, month and year first above written.
SIGNED in the presence of :