DEED OF PARTNERSHIP OF H.U.F. BUSINESS
This Deed of Partnership is made at ……………..this………………..day of………between (1) .............………….of the First Part (2) .............…………….. of the Second Part (3) .............. ………of the Third Part and (4) ..............….. of the FOURTH PART being a Minor by his father and natural guardian Party of the First Part all of ……………Hindu inhabitants as follows
1. The Parties are members and Co-parceners of their joint and undivided Hind family, the Party of the First Part being the father, the Party of the Second Part being his wife and Parties of the Third and Fourth Parts being their sons of whom the Party of the Fourth Part is minor.
2. The Parties hereto as members of their joint and undivided Hindu Family have an ancestrol business of dealing in or manufacturing
3. The assets of the business consist of ……………………
4. The parties have decided to partition the joint family properties but as the said business cannot be partitioned it is proposed to convert the said business into a partnership business each party hereto being given the same share therein as he or she is entitled to as on partition in the joint family property under the Hindu Law.
5. As on partition, the Parties hereto are all entitled to one fourth equal share.
6. As the party of the Fourth Part is a minor and can not be a partner, he will be admitted only to the benefits of the partnership with a right to join as a regular partner on his completing eighteen years of age.
NOW It is agreed by and between the Parties hereto as follows:
(1) As from the…………..day of……the said business shall be carried on by the Parties hereto in contractual partnership and not as members of the said Joint Hindu family
(2) The business will be carried on at the same place where it is carried on at present namely at……………..and will be carried on in the name of M/s………..
(3) The business will be the same as carried on by the joint family namely to deal in (or manufacture of) and also such other business as the Parties hereto shall from time to time decide.
(4) The existing assets of the said business carried on by the family will be the assets of the partnership with the goodwill and will belong to the Parties hereto in equal shares
(5) The net profits of the said business will be shared by the Parties hereto in equal shares. However the losses if any will be borne and paid by the Parties of the First. Second and Third Part equally.
(6) The Party of the Fourth Part is admitted to the benefits of the partnership without any liability for the losses or debts incurred hereafter.
(7) The Party of the Fourth Part will be admitted as a regular partner on his completing the age of 18 years if he is so elects In the event of the Party of the Fourth Part not electing to join as a partner of the Firm he will be paid his share in the assets of the partnership and in the profits accrued and not paid to him till then.
(8) The share of the Party of the Fourth Part in the net profits of the firm will be paid to the Party of the First Part as his father and natural guardian, within three months from the end of each accounting year.
(9) The Parties of the First Part and Third Part will be working partners and will be paid a monthly remuneration of Rs……….and Rs……………..respectively.
(10) One or more banking accounts will be opened in the name of the Firm in such bank as the Parties of the First, Second and Third Parts will decide and will be operated by any one of the Parties of the First Part and the Third Part.
(11) If any difference of opinion arises between the Parties, the decision of the Party of the First Part will prevail and binding on the others.
(12) The accounting year of the Firm will be from 1st April to 31st March of each Christian calendar year.
(13) At the end of each accounting year an account of the business carried on in that year will be made and a statement of accounts, namely, a Balance Sheet and Profit and Loss Account will be prepared and signed by the partners. If necessary or required by law the accounts will be got audited by a Chartered Accountant.
(14) The books of account and all other record of the firm will be always kept at the office of the firm and will be open for inspection by any of the partners hereto at any time.
(15) All the working staff such as clerks, peons, accountants, cashiers, salesmen and others will be appointed by the joint consent of the parties, and their wages and salaries and other emoluments will be fixed by mutual consent.
(16) (a) Each of the parties of the First and Third Parts hereto shall be just and faithful to the other.
(b) render true accounts and full information of all moneys and dealings affecting the Firm to the other.
(c) indemnify the Firm for or against any loss caused to it by his willful negligence or fraud in the conduct of the business.
(d) not carry on any business similar to the business of the Firm or any other business anywhere without the consent of the other partners.
(e) attend to the business of the Firm diligently and actively.
(f) not withdraw any amount for his own benefit or use as remuneration or otherwise without the consent of the others.
(g) be entitled to be indemnified by the Firm in respect of payment made and liabilities incurred by him,
(h) in the usual and proper course of business of the Firm and (ii) in doing any act for protecting the Firm from loss in emergency.
(18) All the tangible and intangible assets of the Firm including the goodwill, stock-in-trade, benefit of business licences and permits, benefits of contracts entered etc. will belong to the partners hereto in equal shares and the property of the Firm shall be used by the parties exclusively for the business of the Firm.
(19) Every party shall account for the profits earned from any transaction of the Firm or by the use of the property in any business transaction of the Firm.
(20) Any of the Parties shall not, without the consent of the other -
(a) submit any dispute with any other person to arbitration or compromise or relinquish any claim of the Firm.
(b) withdraw any suit or legal proceedings filed by the Firm.
(c) Admit any liability of the Firm.
(d) acquire or dispose of any immoveable or moveable property,
(e) except the stock in trade in the ordinary course of business.
(f) enter into partnership or other business unilaterally with any other person.
(g) assign or transfer his share or any interest in the Firm. Admit any person as a partner in the Firm.
(h) borrow any moneys for or in the name of the Firm, or create any security or charge on the assets of the Firm.
(j) enter into any contracts except contracts in the regular course of business of the Firm.
(j) stand as guarantor or surety for any person, in the name of the Firm or for and on behalf of the Firm.
(21) If any party hereto desires to retire from the Firm or to dissolve the Firm he shall give to the other at least one month's previous notice to that effect and on the expiration of the notice period the Firm shall stand dissolved.
(22) If any partner retires from the Firm and the partnership is dissolved and on such dissolution the business of the Firm is taken over by one partner, the other partners will not be entitled to carry on the same or similar business as that of the Firm, within an area of two kilometers from the office of the Firm and for a period of two years from the date of retirement and he shall not carry on any business in the same name as that of the Firm.
(23) If any dispute or difference shall arise between the parties touching the business of the firm or interpretation of any provision hereof or otherwise, howsoever relating to the Firm and its business the same shall be referred to arbitration of a common arbitrator if agreed upon, failing which to two arbitrators one to be appointed by each party to the dispute and the arbitration shall be governed by the Arbitration and Conciliation Act of 1996.
(24) The Parties shall, as early as possible but in any event within the prescribed period if any get the Firm registered under the Partnership Act. 1932 and notified under the Income Tax Act, 1961.
(25) This Deed is executed in duplicate and one copy will remain with the party of the First Part and the other will remain with the party of the Third Part.
In witness whereof the Parties of the First, Second and Third Parts have put their signatures hereto the day and year first herein above written.
Signed by the within named (1) (2) (3)
Parties of the First second and third Part above mentioned in the presence of