Templates / Partnership Deed

Partnership Deed

Partnership deed template for India. Profit sharing, roles, dissolution clauses. eSign for ₹15.

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What is a Partnership Deed?

A partnership deed is a legal agreement between two or more persons who agree to carry on a business together and share its profits. It is governed by the Indian Partnership Act, 1932. Section 4 defines a partnership as "the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all." While a partnership can exist without a written deed, having one is essential for clarity and to enable registration with the Registrar of Firms.

Essential Clauses in a Partnership Deed

Name of the firm and principal place of business
Names and addresses of all partners
Nature of business
Capital contribution by each partner
Profit and loss sharing ratio
Roles, responsibilities, and authority of each partner
Salary/remuneration to partners (if any)
Interest on capital and drawings
Admission and retirement of partners
Dissolution procedure and settlement of accounts
Banking and accounting arrangements
Dispute resolution mechanism

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Stamp Duty & Registration

Partnership deeds require stamp duty under the Indian Stamp Act, 1899. The rate varies by state — typically ₹500–₹5,000 depending on the state and capital contribution. The deed must be executed on stamp paper of the appropriate denomination.

Registration: Registration with the Registrar of Firms is not mandatory but strongly recommended. Under Section 69 of the Indian Partnership Act, an unregistered firm faces significant legal disabilities — partners cannot file suits against each other or third parties in relation to the firm.

Can a Partnership Deed Be Signed with Aadhaar eSign?

Yes. The partnership deed itself can be signed with Aadhaar eSign under Section 3A of the IT Act, 2000. However, registration with the Registrar of Firms is a separate process that requires filing with the local Registrar.

Learn more in our Complete Guide to Aadhaar eSign →

Common Mistakes to Avoid

✗Not registering the partnership — Section 69 disabilities are severe (cannot file suits, cannot enforce claims against third parties)
✗Unclear profit/loss sharing ratio — must be explicitly stated
✗Not defining each partner's authority to bind the firm
✗Missing dissolution procedures — leads to expensive disputes
✗Not specifying whether goodwill is shared and how it's valued

Frequently Asked Questions

Is partnership registration mandatory?

No, but it's strongly recommended. Under Section 69 of the Partnership Act, an unregistered firm cannot sue other firms or third parties, and partners cannot sue each other in relation to the firm. These are severe legal disabilities.

How many partners can a partnership have?

Minimum 2, maximum 50 partners (as per Companies Act limit for associations). For banking business, the maximum is 10.

Can a partnership deed be amended later?

Yes, with the consent of all partners. The amendment should be documented in a supplementary deed executed with the same formalities (stamp duty, signatures) as the original deed.

What happens if there's no partnership deed?

Without a written deed, the partnership is governed by default provisions of the Partnership Act — equal profit sharing, no salary to partners, no interest on capital. This rarely matches what partners actually intended.

Disclaimer

This template is for informational and reference purposes only and does not constitute legal advice. Laws and regulations change periodically. This template may need modification based on your specific circumstances and state laws. Consult a qualified legal professional before executing any legal document. For stamp duty requirements, verify current rates with your state's registration department. SignSetu is not responsible for any consequences arising from the use of this template. Last updated: April 2026.

Governing Law: Indian Partnership Act, 1932 (Section 4 (definition), Section 69 (registration consequences))

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What is a Partnership Deed?

Essential Clauses in a Partnership Deed

Name of the firm and principal place of business

Names and addresses of all partners

Nature of business

Capital contribution by each partner

Profit and loss sharing ratio

Roles, responsibilities, and authority of each partner

Salary/remuneration to partners (if any)

Interest on capital and drawings

Admission and retirement of partners

Dissolution procedure and settlement of accounts

Banking and accounting arrangements

Dispute resolution mechanism

Stamp Duty & Registration

Common Mistakes to Avoid

✗Not registering the partnership — Section 69 disabilities are severe (cannot file suits, cannot enforce claims against third parties)

✗Unclear profit/loss sharing ratio — must be explicitly stated

✗Not defining each partner's authority to bind the firm

✗Missing dissolution procedures — leads to expensive disputes

✗Not specifying whether goodwill is shared and how it's valued