DEED OF PARTNERSHIP BETWEEN TWO PERSONS, CONTAINING NECESSARY COVENANTS, CONDITIONS AND RESTRICTIONS AS TO THE MODE OF CARRYING ON THE BUSINESS
THIS INDENTURE made the ........... day of ........... 20……….BETWEEN ......................... of etc. of the ONE PART, and ..................... of etc. of the OTHER PART.
WITNESSETH, that each of them the said ............................................... and .................................... (so far as the stipulations and provisions hereinafter expressed and contained are to be performed or observed by him his executors or administrators), doth hereby for himself his heirs executors and administrators, covenant with the other his executors and administrators, that they the said ..................... and .................... will become and remain partners for the purposes and period, and subject to the stipulations and provisions, hereinafter expressed and contained, that is to say,-
1. The business of the partnership shall be that of ........... , and shall be carried on at .......... , or at such other place as the partners shall hereafter agree upon.
2. The partnership shall commence on the day of the date of these presents, and continue for the term of ........... years, if both partners shall so long live.
3. If at the end of the first seven years of the said term either partner shall be desirous of determining the partnership, and of such desire shall give not less than six calendar month’s previous notice in writing to the other partner, or leave such notice at the place where the said business shall for the time being carried on, then immediately upon the end of the said ........... months the partnership shall determine.
4. The partnership shall be carried on under the firm name of ...........
5. The capital of the partnership shall consist of the sum of Rs ........... , to be brought into the said business by the partners in equal shares and the same shall carry interest @ 12% per annum which shall be cumulative and paid out of book profits except when the firm suffers any loss and in that case the loss will be carried over and set off against the profits of the subsequent year or years.
6. The said capital and the profits arising there from (including the premiums to be paid for any apprentice to be taken by either partner), shall (subject as hereinafter is mentioned) be employed in the business of the partnership.
7. The bankers of the partnership shall be Messrs ........... of ........... aforesaid, or such other bankers as the partners shall agree upon; and all monies belonging to the partnership not required for current expenses, shall be paid into the bank to the credit of the partnership account, and all cheques shall be drawn in the name of the firm.
8. The rent of the houses factories and buildings in ........... aforesaid, or of any other houses factories and or buildings where the business of the partnership shall be carried on, and all repairs additions and alterations of in to or about the same, and all taxes rates assessments payments for insurance against loss by fire and other outgoings for or in respect of the same, and the salaries wages and maintenance of all clerks salesmen workmen servants and apprentices who shall be employed in or about the business of the partnership, and all expenses which shall be incurred in or about the said business, and all duties debts and monies which shall become payable for or upon account of the said business, and all losses and damages which shall happen in or about or in relation to the said business, shall be paid defrayed and borne by and out of the capital of the partnership and the profits thereof, or in case the same shall become deficient, then by the partners in equal shares.
9. In each year during the partnership, each partner as working partners shall draw out as his remuneration or salary the sum of Rs ........... , by equal monthly payments, on the........... day of ........... every month and if upon taking the general annual account hereinafter directed, it shall appear that the share of either partner in the gross salary payable to him shall not have amounted to the total amount of such monthly payments to each partner, then immediately after such general annual account shall have been made and signed, he shall refund the difference between the amount which he shall have drawn out by way of his remuneration and the amount of his actual salary that he is entitled to.
10. The partners as working partners shall throughout the partnership diligently and faithfully and actively employ themselves in and about the business of the partnership, and carry on and conduct the same for the greatest advantage of the partnership.
11. Each partner shall be just and faithful to the other partner, and to the partnership, in all dealings and transactions in or about the business of the partnership, and shall render a just and faithful account thereof whenever the same shall be reasonably required.
12. Each partner shall upon any reasonable request of the other partner, inform him of all letters accounts writings and things in anywise concerning the business of the partnership which shall have come to his hands or knowledge.
13. Neither partner shall, either alone or with any other person, either directly or indirectly, engage in any trade or business, except upon the account and for the benefit of the partnership.
14. Neither partner shall take any apprentice, or hire or dismiss any clerk salesman workman or servant in the business of the partnership, without the consent of the other partner.
15. Neither partner shall, during the partnership, take or go on any tour or journey on account of the partnership or otherwise, without the consent of the other partner and if either partner shall do so, he shall for such time as he shall be upon any such tour or journey forfeit a proportionate part of his share in the book profits of the partnership, or the sum of Rs ........... , at the option of the other partner.
16. Neither partner shall, without the consent in writing of the other partner, employ any of the monies goods or effects of the partnership, or engage the credit thereof, in anything except upon the account or for the benefit of the partnership.
17. In all cases where there shall be occasion to give any promissory note, bill of exchange or other security for the payment of any money on account of the partnership (other than and except when the contrary shall in the common course of business be unavoidable), the same shall be signed or executed by both partners.
18. If either partner shall give any such bond, promissory note, bill of exchange or other security (except in the cases before mentioned), which shall not be signed and executed by the other partner every such bond, promissory note, bill of exchange or other security shall be deemed to be given on the separate account of the partner giving the same, and he shall accordingly pay and discharge the same out of his own monies, and shall indemnify the other partner and his heirs executors and administrators against the payment thereof, and against all actions suits and expenses on account thereof.
19. Neither partner shall lend any of the monies, or deliver upon credit any of the goods, of the partnership, to any person or persons whom the other partner shall previously by notice in writing have forbidden him to trust.
20. If either partner shall, after such notice as aforesaid, lend any money, or deliver upon credit any goods, of the partnership, the partner so lending or delivering upon credit such money or goods, shall pay to the partnership, in ready money, the fully amount or value of the money or goods which he shall have so lent or delivered upon credit as aforesaid.
21. Neither partner shall buy order or contract for any ........... or other article, exceeding the value of Rs ........... , without the previous consent in writing of the other partner, and if either partner shall, without of such previous consent, buy order or contract for any ........... or other article, exceeding the value of Rs ........... , the other partner shall have the option, either of taking such ........... or other article for and on account of the partnership, or of letting the same remain and be for the separate use of the partner, who shall have so bought ordered or contracted for the same, and he shall accordingly take and pay for the same out of his own monies.
22. Neither partner shall, without the previous consent in writing of the other partner, enter into any bond, or become bail surety or security with or for any person, or subscribe any policy of insurance.
23. Neither partner shall do or willingly suffer anything whereby or by means whereof the stock in trade capital or property of the partnership may be seized attached extended or taken in execution.
24. Each partner shall punctually pay and discharge the debts now due or hereafter during the partnership, to become due from him, and shall at all times keep indemnified the other partner his executors and administrators, and the stock in trade capital and property of the partnership, against his present and future private and separate debts and engagements, and against all actions suits and expenses on account thereof.
Proper books of account shall be kept by the partners, and true plain and perfect entries shall be made therein of all the monies goods wares merchandize debts and other effects belonging or owing to or by the partnership, or which shall be received paid sold or contracted for in the course of the business of the partnership, and of all such other transactions or things in anywise relating to the said business as are usually written and entered into books of account kept by persons engaged in the business of ..........., together with all such circumstances of names times and places as may be necessary or useful for the better manifestation of the state and proceedings of the business of the partnership.
26. The said books of account, together with all bonds promissory notes bills of exchange, assurances, securities, letters and other writings which shall from time to time concern or belong to the partnership, shall be kept at the place of partnership business at ........... aforesaid, or at such other place where the business of the partnership shall for the time being be carried on, as the partners shall agree upon, and each partner shall have free access to inspect examine cast up and take copies of or extracts from the same at pleasure.
27. On the ........... day of .....20……….and on the ........... day of ......20…………in every succeeding year during the partnership, a full and general account in writing shall be taken by the partners of all goods wares merchandise and effects which shall have been bought or sold in the business of the partnership (in the first general account from the day of the commencement of the partnership, and in each subsequent general account from the day of the last preceding one), and of all the monies stock in trade debts and effects belonging or due to the partnership, and of all monies and debts due by, and of all the liabilities of the partnership, and of all such matters and of the like nature, taken by persons engaged in the business of ........... , and a just valuation shall be made of all the particulars included in each general account which require and are capable of valuation, and each general account and valuation shall be written into two books, and signed in each book by both partners within three calendar months after the time appointed for taking thereof, and such signature each partner shall take one of the books into his custody and be bound and concluded by every such account and valuation respectively, except that if and whenever any manifest error shall be found therein within twelve calendar months after the same shall have been so signed by both partners, and shall be signified by either partner to the other, such error shall be rectified.
28. The partners shall be entitled to the net profits arising from the business of the partnership in equal shares, and the same shall be carried to their credit respectively in the books of the partnership immediately after every annual account shall have been taken and signed, and drawn out.
29. Within six calendar months after the expiration or determination of the partnership, otherwise than by the death of either partner, a full and general account in writing shall be taken by the partners, of all the monies stock in trade debts and effects then belonging or due to the partnership and of all monies and debts due by, and of all the liabilities of, the partnership, and a just valuation shall be made of all the particulars included in such account which require and are capable of valuation, and immediately after such last-mentioned account shall
30. have been so taken and settled, the partners shall forthwith make due provision for the payments of all monies and debts then due by the partnership, and for meeting all the liabilities thereof, and subject thereto, all the monies stock in trade debts and effects then belonging or due to the partnership, shall be divided between the partners in equal shares, and such instruments in writing shall be executed by them respectively for facilitating the getting in of the outstanding debts and effects of the partnership, and for indemnifying each other touching the premises, and for vesting the sole right and property in the said respective shares in the said monies stock in trade property and effects in the partner to whom the same respectively shall upon such division belong, and for releasing to each other all claims on account of the partnership as are usual in cases of the like nature.
31. If either partners shall die during the partnership, his executors or administrators shall, if such death shall happen before the day hereinbefore appointed for the first general annual account and valuation, be entitled to the capital belonging to and brought in by the deceased partner, or if the same shall happen after that day, then to such sum of money as the share of the deceased partner in the monies stock in trade debts and effects of the partnership shall upon the then last general annual account and valuation amount to, or as such share should have amounted to in case such annual account had been taken on the ........... day of .......20…………. (the proper day for taking such account) immediately preceding such death; AND in either case, the executors or administrators of the deceased partner shall also be entitled to an allowance at the rate of Rs ........... per cent per annum upon the capital or share of capital and property (as the case may be) of such deceased partner, in lieu of profits, from the commencement of the partnership, or from the then last general annual account and valuation (as the case may happen), up to such death, such allowance in lieu of profits to be paid by the surviving partner his executors or administrators on demand, and such other sum of money as the executors or administrators of the deceased partner shall so become entitled to as aforesaid, with interest for the same at the rate aforesaid computed from the death of the deceased partner, to be secured and paid as follows, that is to say, the surviving partner his executors or administrators shall within ........... next after such death duly execute and deliver unto the executors or administrators of the deceased partner a bond in a penalty double the principal sum payable to them, conditioned for the payment of the same sum, with interest after the rate aforesaid from such death, in manner following, that is to say, one equal third par t of the said principal sum, with interest on the whole of the said principal sum at the end of six calendar months from the date of such bond, one other equal third part of the said principal sum, with interest on so much of the said principal sum as shall for the time being remain unpaid, at the end of twelve calendar months from the date of such bond, and the remaining one equal third part of the said principal sum, with interest on so much of the said principal sum as shall for the time being remain unpaid, at the end of eighteen calendar months from the date of such bond.
32. The surviving partner his executors or administrators shall also enter into a covenant with, or give and execute a bond in a sufficient and reasonable amount unto, the executors or administrators of the deceased partner for indemnifying them and the estate and effects of the deceased partner against the debts due from, and the liabilities of, the partnership, at the time of such death, and against all actions suits expenses claims and demands on account of the same; and the executors or administrators of the partner so dying shall release and assign unto the surviving partner his executors and administrators, all their share right and interest in and to the goodwill monies stock in trade debts and effects belonging or due to the partnership, and empower and enable him and them, as much as in them lies, to recover and receive the same.
33. Whenever any doubt difference of dispute shall hereafter arise between the partners, or between one of them and the executors or administrators, or between their respective executors or administrators, touching these presents or the construction hereof, or any clause or thing herein contained, or any account valuation or division of assets debts or liabilities to be made as hereinbefore is mentioned, or any other thing in anywise relating to or concerning the partnership business or the affairs thereof, or the right duties or liabilities of either party in connection therewith, the matter in difference shall be referred to the two arbitrators or a third arbitrator/Presiding Arbitrator pursuant to, and so as, with regard to the mode and consequence of the reference, and in all other respects, to confirm to the provisions in that behalf contained in Arbitration and Conciliation Act, 1996 or any statutory modification thereof.
IN WITNESS WHEREOF, etc.