Assignment 28 FS
Assignment 28 FS
Assignment 28 FS
PARTNERSHIP
DEED
NAME: FAAREHA SHAHID
ROLL NO: 20
CLASS: BA LLB(h) SEM VIII REGULAR
SUBJECT: CLINICAL II
SUBMITTED TO: ADV RAJESH SHARDA
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INTRODUCTION
A partnership is a kind of business where a formal agreement between two or more people is
made and agreed to be the co-owners, distribute responsibilities for running an organization
and share the income or losses that the business generates. This features of partnerships are
documented in a document which is known as partnership deeds.
A partnership deed also called as a partnership agreement, is a record that outlines in detail
the rights and functionalities of all parties to a business operation. It has the force of law and
is designed to guide the partners in the conduct of the business.
If one needs to understand the partnership deed, before that he/she needs to know how does
the partnership deed come into existence. When two or more people want to start a new
business & to share the profits & losses they come together to form a partnership such written
agreement is known as ‘Partnership Deed’. One can also call it is a ‘Partnership Agreement’.
And when such business gets registered by its own name the same is called as a ‘Partnership
Firm’.
Partnership Deed is a written Partnership Agreement. It is basically made when two or more
people want to start a new business they come together under the mutual understanding with
the only purpose to do business & share profits & losses in the decided manner.
1. Number of Members:
In a Partnership, there is a minimum requirement for two members. Previously there was a
limitation on the number of partners as follows:
If there are more partners than the given above then it becomes illegal to continue the
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The sections of partnership deed can be modified with the accord of all the partners. The deed
must be appropriately drafted and outlined as per the provisions of the ‘Stamp Act’ and
ideally registered with the Registrar of Firms.
All the rights and responsibilities of each member are documented ina a document known as
Partnership Deed. This deed can be oral or written, however, an oral agreement is of no use
when the firm has to deal with the tax. Few essential characteristics of partnership deed area:
The sections of partnership deed can be modified with the accord of all the partners. The deed
must be appropriately drafted and outlined as per the provisions of the ‘Stamp Act’ and
ideally registered with the Registrar of Firms.
While making partnership deed all the provisions and the legal points of the partnership deed
are included. This deed also includes basic guidelines for future projects and can be used as
evidence at times of conflict or legal procedures. For a general partnership deed below
mentioned information should be included.
The Partnership Firm name accepted by all the partners should be mentioned. The
name should not have titles like “company” or “private company”
Business nature should be mentioned
The origin date of the business
Headquarters and branches address
Duration of Partnership (if applicable)
Partner’s contribution to the capital, Profit sharing ratio, and Salary to be mentioned
Interest on contribution and the Interest. Retirement or suspension terms and
conditions of the retirement or expulsion of a partner
Preparation of the business’s accounts and the terms for internal and legal audit
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Procedure for dissolution of a firm and guidelines for resolving any conflicts and
agreement method to follow
It controls and monitors the rights, responsibilities, and liabilities of all the partners
Avoids dispute between the partners
Avoids confusion on profit and loss distribution ratio among the partners
Individual partner’s responsibilities are mentioned clearly
Partnership deed also defines a remuneration or salary of the partners and working
partners. But, interest is paid to each partner who has invested capital in the business.
DEED OF PARTNERSHIP
THIS DEED OF PARTNERSHIP is executed on this 1ST day of January 2019 between:
a. Sh. Rajiv Shukla s/o, Sh. Baghi Shukla, r/o of 2/3 CR Park, New Delhi, hereinafter
referred to as the "First Party" and
c. Sh. Abdul Jabbar s/o, Sh. Yasser Jabbar, r/o of C-2, Zakir Nagar, New Delhi, hereinafter
referred to as the "Second Party" and
The Party of the First Part and Second Part hereinafter collectively referred to as the
"Parties".
WHEREAS all the Parties are desirous of joining hands to carry on the business of organic
farming in Partnership, it has been mutually decided to reduce into writing the terms and
conditions of the Partnership.
1. Name
That the business of the Partnership shall be carried on under the name and style of Farm
Fresh Company.
2. Term of Partnership
That the Partnership shall be deemed to have commenced from March 2019 and shall
continue unless otherwise determined by the Parties.
That the business of Partnership shall be carried from New Delhi or any other place as may
be agreed upon by the Parties.
That the necessary capital as well as further funds required for the purpose of Partnership
business shall be contributed or arranged by the Parties equally and in such manner as may be
mutually agreed upon by and between the Parties from time to time. Interest at the rate of 2
percent per annum or as may be prescribed under Section 40 (b) of the Income Tax Act, 1961
or any other applicable provisions as may be in force under the Income tax assessment of
Partnership firm for the relevant accounting period shall be payable to the Parties on account
standing to the credit of the account of the Parties. Such interest shall be calculated and
credited to the account of each partner at the close of each accounting year. However, in case
of loss or lower income, rate of interest can be nil or lower than 1 percent as may be agreed
upon by and between the Parties from time to time.
6. Remuneration
That the First Party and the Second Party shall be the working partners in the firm and they
shall be entitled to a remuneration of Rs. 20,00,000 (rupees twenty lakh only) per month and
Rs. 20,00,000 (rupees twenty lakh only) per month, respectively which shall be paid by the
10th of each month. The Parties shall be entitled to increase or reduce the above remuneration
as may be agreed upon from time to time by and between the parties.
7. Drawings by Partner
Each partner shall be entitled to draw (in addition to the remuneration as per clause 6) out of
the partnership business any sum or sums of money not exceeding Rs. 10,00,000 (rupees ten
lakh only) per month for his own use, such sums to be duly accounted for on each succeeding
settlement of accounts and division of profits of the partnership and if any excess drawings is
found on any such settlement, the same shall be refunded by the partner(s) concerned (with
interest at percent per annum).
8. Maintenance of Accounts
That regular books of accounts shall be maintained during the course of the business and
these shall be closed on the 31st March each year and shall be opened to inspection of the
parties to this deed at all reasonable hours at the Principal place of business.
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That the Bank account(s) of the firm will be operated by the Parties jointly or any two of
them jointly.
a. work honestly, diligently and shall devote their whole time and attention to the business of
the firm.
c. give complete and truthful details of all matters relating to the affairs of the firm.
(a) Engage or be concerned or interested in any other business or occupation either directly or
indirectly;
(b) Take any apprentice or hire or dismiss any agent or servant of the firm;
(c) Lend any of the moneys or deliver, upon credit, any of the goods of the firm to any person
or persons whom the other partner shall have previously in writing forbidden him to trust;
(d) Except in the ordinary course of business give any security or promise for the payment of
money on account of the firm;
(e) Draw or accept or endorse any bill of exchange or promissory note on account of the firm;
(f) Remit the whole or any part of any debt or sum due to the firm;
If all partners agree, a new Partner may be introduced into the business of the Partnership on
such terms and conditions as may be mutually agreed between the Parties to this deed and the
new partner
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In the event of death of a partner, the Partnership shall continue with the nominee/ legal heir
of such Partner, joining the firm.
OR If, during the continuance of the partnership, any partner retires or dies, the remaining
partner or partners shall have the option, by giving a notice in writing to the retiring partner
or to the legal representatives of the deceased partner, as the case may be, within a period of
___ days after the retirement or death, to purchase the share of the other partners, at the date
of his retirement or death, in the capital and assets of the partnership. The purchase price, in
such an event, shall be such price as is mutually decided by and between the parties.
If, however, the option to purchase share of the retiring or deceased partner is not exercised
as aforesaid the partnership shall be wound up and the assets distributed as per the provisions
of the Indian Partnership Act, 1932.
(a) That the Partnership is at will and may be dissolved at any time mutually or by giving one
month notice in writing by the outgoing party to the others.
(b) That in the case of dissolution of the firm the net realization on the sale of assets shall be
distributed amongst the Parties equally after meeting the liabilities of the firm.
Every dispute or difference arising between the partners as to the interpretation, operation, or
effect of any clause in the partnership which cannot be mutually resolved, shall be referred to
the arbitration of Mr. Mohd Oves (name of the Arbitrator) failing him, to any other arbitrator
chosen by the partners in writing. The decision of such an arbitrator shall be binding on the
partners. Subject as aforesaid the Arbitration and Conciliation Act, 1996 and the rules made
thereunder shall apply to the arbitration proceedings under this clause.
Except as aforesaid, the Partnership shall further abide by the provisions of the Indian
Partnership Act, 1932.
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IN WITNESS WHEREOF, the parties have set their hands this 1st day of January 2019.
First Party
Second Party
Witnesses: