DEED OF SUB-PARTNERSHIP
THIS DEED OF SUB PARTNERSHIP made at .............. on the ................ day of .................... 20…. BETWEEN (1) .................................... of .............., Indian Inhabitant, having address at ............................................................................ ......................................................................................, hereinafter referred to as “.............................” (which expression shall, unless it be repugnant to the context or meaning thereof, include his/her heirs, legal representatives, executors, administrators and assigns) of the ONE PART; and (2) ........................................... of ................, Indian Inhabitant, having address at ................................................ ......................................................................................................................, hereinafter referred to as “.........................................” (which expression shall, unless it be repugnant to the context or meaning thereof, include his/her heirs, legal representatives, executors, administrators and assigns) of the OTHER PART;
WHEREAS:-
(a) ............................ as partner is carrying on business of ........................................ in partnership with.................................. in the firm name of M/s. ................................................ (hereinafter referred to as the “Main Partnership”) as from ....................................... The share of ....................................... in the said main partnership and in it’s assets and liabilities and its profits and losses is ........................... The remaining 40% share is with the said ...................................
(b) The parties hereto between themselves are desirous of entering into a Sub-Partnership in respect of the said share of ................................................................................................................ in the profits and losses as also in the assets and liabilities in the said main partnership. The parties hereto, as between them, shall hereinafter be referred as the Sub Partners.
(c) There is no bar upon ........................................... from entering into this Sub-Partnership.
OR
(c) .................................. has given his no objection to .................................... entering into this Sub-Partnership.
(d) The Parties are desirous of recording the terms and conditions agreed between them as appearing hereinafter.
NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED AND RECORDED BY AND BETWEEN THE PARTIES HERETO AS HEREUNDER:-
1. The business of the Sub Partnership shall be to share the profits and losses as also the assets and liabilities coming to the share of ABC in the said main partnership of the said firm of M/s. .................................... . The relationship between the Sub-Partners shall be governed as per the terms and conditions recorded herein.
2. The Sub-Partnership between the parties hereto shall be deemed to have commenced on the ................ day of ............ 20.......
3. The Sub-Partnership shall be deemed to be an Association of Persons (AOP) between the parties hereto within the meaning thereof under the provisions of Income Tax Act, 1961.
4. The Sub-Partnership shall be “At Will”.
5. The parties shall open a bank account of the Sub-Partnership as Association of Persons (AOP) with such bank/s as may be mutually agreed and shall be operated by the parties under the Joint Signature of both the parties or as may be mutually agreed upon between them. The parties shall ensure, as far as possible, that all receipts by ........................................ from the main partnership coming therefrom to his share shall be got deposited in the such Bank account/s of AOP.
6. The accounting year of the Sub-Partnership shall be from ..............................................................
7. The share of Sub-Partners in all receipts, income, profits, assets as also losses and liabilities of the main partnership arising on account of ABC’s share therein shall be shared between the parties hereto as follows:-
NAMES
PERCENTAGE
(i) .............................
50%
(ii) ..................................
50%
100%
8. The capital of the Sub-Partnership shall be the sum required to be invested by ................................... in the business of main partnership and shall be provided by the Sub Partners in the aforementioned share of their profit and loss sharing ratio as per the present Sub-Partnership.
9. It is agreed, clarified and recorded between the parties as under:-
(a) This Sub-Partnership is a partnership between the parties hereto limited to the said ......................................... held by him in the said main partnership firm of M/s. .....................................................
(b) All the profits and income receivable from the main Partnership by ....................................... as his share and notwithstanding that the same shall be received by ............................... in his own name from the said main partnership, shall be treated as income of this Sub-Partnership.
(c) Similarly, If there is any loss to the account/share of ............................... in the said main partnership, it shall be the responsibility and obligation of this sub Partnership to bear and pay the same to the extent of the said share of ...................... in the main Partnership.
(d) On dissolution of the said main partnership or upon ...................... ceasing to be a partner of the said main partnership and/or his relationship in the main partnership coming to an end, .......................... shall, in such event, be entitled to receive his pro-rata share in the share received/receivable by ......................... in the assets and profits of the main partnership.
(e) The present Sub-Partnership shall not in any manner affect the position of ................................ as the partner in the main partnership though between the parties hereto .................................... is representing the present sub-partnership.
(f) shall not be treated as a partner of the main partnership. However, shall be entitled to receive from ABC their share of profits out of the share of ABC in terms of this Sub-Partnership.
0. If any Sub-partner desires to retire from the Sub-Partnership he/she may do so after giving three calendar months prior notice in writing to the other Sub-Partners.
11 Death of any of the Sub-partner shall not dissolve the Sub-partnership but one of the legal representatives of the deceased Sub-partner (as may be agreed between them) shall be taken up as a Sub-partner in his/her place. In the event of death or insolvency of , the same shall be governed by the provisions of the Deed of Partnership of the main partnership Firm of M/s. ............................................................... In the event of any of the legal representative of being admitted as partner in the main partnership, the provisions of this Sub-Partnership shall be binding on such legal representative who shall carry out the provisions of this Deed.
15. The present Sub-Partnership which is being formed as an AOP shall be deemed to be a partner in the main partnership firm of M/s. .................................................... for the limited purpose under the provisions of Income Tax Act, 1961. The parties hereto shall get the present Sub-partnership registered as an AOP with appropriate Income Tax Department under Income Tax Act, 1961.
16. In the event of any dispute, differences, non-compliance or non-payment arising between the parties hereto with regard to these presents or interpretation thereof and which cannot be mutually resolved within a reasonable time the same shall be referred to the Arbitration under the provisions of The Arbitration and Conciliation Act, 1996 or any modification thereof. The Arbitration shall be held in the city of .................................
IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and year first hereinabove written.
SIGNED AND DELIVERED by the within-named, of the One Part, in the presence of. ..
SIGNED AND DELIVERED by the within-named, of the Other Part in the presence of. ..
