Partnership Deed Generator

About the Partnership Deed Generator

Enter the firm and its partners, and the generator writes a complete partnership deed for an Indian firm: name, business, place of business, commencement and duration, capital, profit and loss sharing, interest on capital, working partners and their remuneration, drawings, bank operation, books of account, duties and decisions, admission, retirement, death and insolvency, optional expulsion and a reasonable restraint on a leaving partner, dissolution and settlement of accounts, arbitration and registration.

Already have a firm? Switch to a supplementary deed to record a partner joining or retiring, a new profit ratio or capital, or a new name, address or business, with the original deed continuing for everything else. The checks panel totals the shares, flags minors and barred firm names, and explains registration and the income-tax limits on partner interest and remuneration. It is a generic template, not legal or tax advice.

Common uses

• Friends or family starting a trading, manufacturing or services firm and needing a deed for the bank account, PAN, GST registration and the Registrar of Firms.
• Recording a partner retiring or a new partner joining with a supplementary deed.
• Changing the profit ratio or capital at the start of a financial year.
• Preparing a clear draft for your chartered accountant or lawyer to finalise.

What applies when the deed is silent

Partners can settle their rights and duties by agreement (Indian Partnership Act 1932, s.11). Where the deed says nothing, s.13 fills the gaps:

• no partner is entitled to remuneration for taking part in the business;
• profits are shared equally and losses borne equally;
• interest on capital, where a partner is entitled to it, is payable only out of profits;
• advances beyond agreed capital earn 6% a year;
• the firm indemnifies partners for proper business payments, and partners indemnify the firm for losses caused by their wilful neglect.

Other defaults: every partner may take part in the business and inspect the books, ordinary matters go by majority but the nature of the business can change only with everyone’s consent (s.12), and a new partner needs the consent of all (s.31). Where no duration is fixed, the partnership is “at will” (s.7) and can be dissolved by notice (s.43).

Registration with the Registrar of Firms

A firm is registered by filing a statement with the Registrar of Firms of the State — the firm name, place of business, partners’ names, addresses and joining dates, and duration — signed by all partners (s.58). Once satisfied that s.58 has been complied with, the Registrar records the statement in the Register of Firms and files it (s.59). Registration is optional, but an unregistered firm cannot sue third parties, and a partner cannot sue the firm or other partners, to enforce rights arising from a contract (s.69). The firm name cannot contain words implying Government sanction — such as Crown, Emperor, Imperial, King, Queen or Royal — without consent (s.58(3)).

Changes must be recorded too: name and principal place (s.60), branches (s.61), partners’ names and addresses (s.62), and partners joining or leaving (s.63). Several States have amended these provisions — Maharashtra, for example, requires a true copy of the deed and registration within one year of constitution — so check your State’s Registrar of Firms portal.

Income-tax limits on partner interest and remuneration

Under the Income-tax Act, 2025 (s.35(e)), a firm can deduct partners’ interest and remuneration only if the deed authorises it and only for the period after the deed:

• interest on capital up to 12% simple a year;
• remuneration only to working partners — on the first Rs 6,00,000 of book profit (or a loss), Rs 3,00,000 or 90% of book profit, whichever is higher, and 60% of the balance.

The deed therefore authorises interest and remuneration “within the limits allowable under the income-tax law for the time being in force”. Amounts for any period before the date of the deed are not deductible unless an earlier deed authorised them (s.35(e)(ii)(B)), so the checks warn when the firm’s commencement date is earlier than the deed. These figures were checked against the Act as enacted; confirm the current limits with your tax adviser before filing.

Admission, retirement and leaving partners

A partner may retire with the others’ consent, as the deed provides, or by notice if the partnership is at will (s.32). A retiring partner stays liable to third parties for acts of the firm until public notice is given — to the Registrar and in the Official Gazette and a local vernacular newspaper (ss.32(3), 72). An incoming partner is not liable for acts before joining (s.31(2)). A partner can be expelled only in good faith under a power in the deed (s.33). A partnership needs at least two partners (s.4), so in a two-partner firm the deed lets the firm continue after a death, retirement or insolvency only if a new partner — for example a legal heir — joins; otherwise the firm is dissolved and its accounts are settled. An outgoing partner may agree not to carry on a similar business for a specified period or within local limits, and that agreement is valid if the restriction is reasonable (s.36(2)) — an exception to the general rule against restraints of trade.

Stamp duty

A partnership deed is chargeable under Article 46 of Schedule I of the Indian Stamp Act 1899 and the corresponding entries in State stamp laws; many States fix the duty by the amount of capital. This tool does not calculate it. Use e-stamp paper or your State’s stamping system before the partners sign.

Sources

• Indian Partnership Act 1932 — ss.4, 7, 9, 11–13, 30–33, 36, 40–43, 48, 58–63, 69, 72 (with State amendments)
• Income-tax Act, 2025 — s.35(e), Gazette of India
• Arbitration and Conciliation Act 1996 — s.7
• Indian Stamp Act 1899 — Schedule I, Article 46

Limitations

• A generic template, not legal or tax advice. Large firms, firms holding immovable property, or complex capital and goodwill arrangements need professional drafting.
• Stamp duty, registration fees and State-specific registration rules are not calculated or checked.
• The income-tax figures in the checks were verified against the Income-tax Act, 2025 as enacted; later amendments may change them.
• Limited liability partnerships (LLPs) are governed by the LLP Act 2008 and need a different agreement.
• The first DOCX or PDF download needs a connection to load the document engine; Print works offline.

Privacy

Everything happens in your browser. Partners’ names, addresses and capital figures are not uploaded or stored by MySmartCoPilot. If you tick Keep a draft in this browser, the form is saved in this browser’s local storage until you untick it.