Standard Format for Partnership Deed

 PARTNERSHIP DEED

This Deed of Partnership is made and executed on this [Day] day of [Month], [Year] at [City/Location, e.g., Nuvem, Goa] by and between: 

1. [Partner 1 Full Name], Son/Wife/Daughter of [Father’s/Spouse’s Name], aged about [Age] years, residing at [Full Residential Address] (hereinafter referred to as the "First Partner").
2. [Partner 2 Full Name], Son/Wife/Daughter of [Father’s/Spouse’s Name], aged about [Age] years, residing at [Full Residential Address] (hereinafter referred to as the "Second Partner"). 

(Add rows for Third, Fourth, etc., partners if applicable. The terms "First Partner" and "Second Partner" shall include their respective heirs, legal representatives, and executors). 

WHEREAS:
The partners have mutually agreed to join hands to carry on the business of [Briefly describe business, e.g., Software Development, Retail Trade, Restaurant] in partnership under the terms, conditions, and provisions set out below.

NOW THIS DEED WITNESSETH AS UNDER:

1. Name of the Firm: The business of the partnership shall be carried on under the trade name and style of "[Your Partnership Firm Name]" (hereinafter called the "Firm"). 
2. Place of Business: The principal place of business of the Firm shall be at [Full Registered Business Address]. The partners may open branches at other locations by mutual consent. 
3. Date of Commencement: The partnership business shall be deemed to have commenced on [Date of Commencement, e.g., April 1, 2026].
4. Duration of Partnership: The partnership shall be "At Will", meaning it can be dissolved at any time by any partner giving [e.g., 30 days] written notice to the other partners. 
5. Capital Contribution: The total initial capital of the Firm shall be ₹[Total Capital Amount, e.g., 5,000,000], which shall be contributed by the partners in the following proportions:
   • First Partner: ₹_________________ ([e.g., 50%])
   • Second Partner: ₹_________________ ([e.g., 50%])
     Any further capital required for the business shall be introduced by the partners upon mutual agreement. 
6. Profit and Loss Sharing: The net profits and losses of the partnership business shall be shared and borne by the partners in the following ratio:
   • First Partner: [e.g., 50%]
   • Second Partner: [e.g., 50%] 
7. Interest on Capital: The partners shall / shall not be entitled to receive interest on their capital contributions. (If yes: "Interest at the rate of [e.g., 12%] per annum shall be paid on the capital standing to the credit of each partner"). 
8. Remuneration to Working Partners: Both partners shall actively devote their time and attention to the business of the Firm. They shall be entitled to a monthly salary/remuneration as follows, in compliance with Section 40(b) of the Income Tax Act, 1961:
   • First Partner: ₹_________________ per month
   • Second Partner: ₹_________________ per month 
9. Banking Operations: The bank account(s) of the Firm shall be opened in any scheduled bank and shall be operated [Select one: jointly by all partners / severally by any single partner / by Partner 1 only]. 
10. Management and Duties: Every partner shall be just and faithful to each other and shall diligently attend to the business of the Firm. No partner shall, without the written consent of the other partners, assign, mortgage, or transfer their interest in the Firm to any third party. 
11. Accounts and Audit: The books of accounts shall be maintained at the principal place of business. Every partner shall have free access to inspect and copy the same. The accounting year of the Firm shall close on the 31st day of March each year. 
12. Retirement or Death:
    • A partner may retire by giving [e.g., 3 months] notice.
    • In the event of the death, insolvency, or retirement of a partner, the Firm shall not dissolve automatically. The remaining partners may choose to continue the business with the legal heirs of the deceased partner or buy out their share based on a valuation of assets and goodwill. 
13. Arbitration: All disputes and differences arising between the partners regarding this Deed or the business of the Firm shall be referred to arbitration under the Arbitration and Conciliation Act before taking legal action in court. 

IN WITNESS WHEREOF, the partners hereto have set their hands and signed this Deed of Partnership on the day, month, and year first written above. 

FIRST PARTNER: ___________________________ (Signature)

SECOND PARTNER: ___________________________ (Signature)

WITNESSES:

1. Signature: ___________________________
   Name: ______________________________
   Address: ___________________________
2. Signature: ___________________________
   Name: ______________________________
   Address: ___________________________

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⚠️ Important Income Tax Compliance

To ensure your firm can successfully claim tax deductions on partner salaries and interest payments under Indian tax law, you must explicitly state the remuneration amounts (or calculation formula) and interest rates directly inside Clause 8 and Clause 7. If these details are missing, the Income Tax Department will disallow those expenses during tax assessments.