Partnership Agreement between Two Partnership Firms
This Deed of
Partnership is made at ... on this... day of... Between M/ s A B & Co. a
partnership firm consisting of (1)... (2)... (3)... partners and carrying on
business at ... hereinafter referred to as the Party of the First Part and M/s.
X Y & Co. a partnership firm consisting of (1)... (2) ... (3).... (4).... as
partners and carrying on business at ... hereinafter referred to as the Party
of the Second Part, as follows
Whereas the Party of
the First Part Is carrying on business at ... and the business consists of
........................
And Whereas the Party
of the Second Part is carrying on business at... and the business consists of
...................
And Where as the
parties hereto have proposed to commence and carry on a third business In
partnership on the following terms and conditions and have proposed to execute
this Deed.
Now it is Agreed by and
between the Parties hereto as Follows:
1.
The
parties hereto agree to carry on the business hereinafter mentioned in
partnership on the terms and conditions herein mentioned, in the name and style
of M/s ...................
2.
The
Partnership shall commence from the .... day of .... 19 ... and the period of
the partnership shall be for three years from the date hereof.
3.
The
business of the partnership (hereinafter referred to as the 'Firm') shall
consist of ... only and no other business shall be undertaken by the Firm except
by mutual consent of all the partners.
4.
The
Office of the partnership shall be at ... The parties may open branches at such
other places as they may be agreed upon.
5.
Each
of the parties of the First and Second Parts have contributed towards the
initial capital of the firm a sum of Rs... In equal ... shares. The partners
will contribute such further amounts towards the capital of the firm in equal
.... shares as may be required from time to time. If any party of the First or
Second Part or any partner of any of the said partnership individually shall
contribute more amount than its share in the capital, it will be treated as a
loan by that party to the Firm. The amounts of capital contributed or loans
advanced by any partner or partners will carry Interest at the rate of 1 8% per
annum or at such maximum rate as may be allowable as deduction from gross
Income under the Income Tax Act for the purpose of calculating taxable income.
6.
The
net profits and losses of the firm will be shared by the parties of the First
and Second Parts in equal shares or proportion. Net Profit will mean the gross
profits earned in such year less the expenses of the management of the business
including the rent of the premises of the firm Including outgoings In respect
of the salaries and wages of the staff, commission paid to others, and all
other expenses incurred In connection with the business. The share in the net
profits and/or losses of each partner of the First Part and of the Second Part
will be shared or distributed among the partners of each of the partners of the
First and Second Part according to the partnership agreements between the
partners of each of the parties hereto of the First and Second Part recorded in
the deeds of partnership of their respective partnerships above mentioned.
7.
The
accounting year of the Firm will be from 1st April to 31st March of each
Christian calendar year.
8.
At
the end of each accounting year an account of the business carried on by the
Firm In that year will be made and a statement of accounts namely a Balance
Sheet and Profit and Loss Account will be prepared and signed by the authorised
representatives of each party hereto. If necessary or required by law the
accounts will be got audited by a Chartered Accountant.
9.
The
Books of account and all other record of the firm will be always kept at the
office of the Firm and will be open for inspection by any of the authorised
representatives of the parties hereto at any time.
10.
Each
of the Party of the First and Second Part will be represented by any partner of
that party duly authorised by the other partners of that party from time to
time, and the authorised representatives alone will be entitled to attend to
the business of the firm and the other partners of that party will not
Interfere in the business of the Firm. The true copies of the resolutions of
the partners of each of the Parties of the First and Second Part appointing
their respective representatives, duly signed by all the partners of that party
will be kept in the records of the Firm. The representative so appointed will
act as the working partner for the accounting year for which he will be
appointed as representative of his Firm. The working partners will be entitled
to remuneration at the maximum rate allowable as deduction from gross income under
the Income Tax Act for taxable income.' Such remuneration may be drawn every
month or periodically as may be agreed upon. the aggregate drawn in a year not
exceeding the maximum limit mentioned above.
11.
In
the event of any difference of opinion between the two authorised
representatives, on any question relating to the business of the Firm the
matter will be placed before a joint meeting of all the partners of each of the
parties hereto of the First and Second Part and discussed. But the matter will
not be decided on the basis of majority of the partners of both the
partnerships but only on the mutual consent of all the partners.
12.
Each
of the Parties of the First and Second Part hereto will be entitled to change
the constitution of its partnership by taking additional partner or partners in
place of those retiring from the partnership or by reason of death or
insolvency of any partner. but such change will be notified to the other Party
hereto from time to time.
13.
The
expressions Party of the First Part will therefore mean and include the
partners or partner for the time being of that partnership and the expression
"Party of the Second Part" will also mean and include the partner or
partners for the time being of that partnership. But no change In the constitution
of the party of the First Part or the party of the Second Part will affect the
terms and conditions of this Deed. All partners each of the party hereto for
the time being shall be deemed to be partners of this Firm and the half share
in the profits and losses of the Firm will shared by the parties of each of the
Parties hereto In proportion to their shares in their respective firms being
the Parties of the First and the Second Part hereto.
14.
Each
of the Party of the First Part and Second Part will be entitled to carry on its
own business but none of them will carry on said business undertaken by this
partnership, directly or indirectly during the continuance of this partnership.
15.
All
the working staff such as clerks. peons. accountants, cashier, salesmen and
others will be appointed by the joint consent of the authorised representatives
of the parties hereto and their wages and salaries and other emoluments will be
fixed by mutual consent of the authorised representatives.
16.
Each
of the Party hereto through its authorised representative shall-
a. participate and
attend to the business of the firm to the greatest common advantage of the
firm.
b. be just and faithful
to each other.
c. render true accounts
and full information of all moneys affecting the Firm to the other.
d. indemnify the Firm
for any loss caused to it by wilful negligence or fraud In the conduct of the
business.
e. Not carry on any
business similar to the business of the Firm anywhere without the consent of
the other party.
f. attend to the
business of the Firm diligently and actively.
g. Not withdraw any
amount for his own or his partnerships benefit or use as remuneration or
otherwise without the consent of the other Party hereto.
h. be entitled to be
indemnified by the Firm in respect of payment made and liabilities incurred by
him - (i) in the usual and proper course of business of the Firm and (ii) in
doing any act for protecting the Firm from loss in emergency.
17.
All
the tangible and Intangible assets of the Firm including the goodwill,
stock-in-trade, benefit of business licenses and permits. benefits of contracts
entered etc. will belong to the parties of the First & Second Parts in
equal shares and the property of the Firm shall be used by the parties
exclusively for the business of the firm.
18.
Every
Party shall account for the profit earned from any transaction of the Firm or
for the use of the property in business transaction of the Firm.
19.
Any
Party of the First or Second Part or any partner thereof shall not. without the
consent of the other -
a. submit any dispute
with any other person to arbitration or com- promise or relinquish the claim.
b. withdraw any suit or
legal proceedings filed by the Firm.
c. admit any liability
of the Firm.
d. acquire or dispose of
any immovable or moveable property, except the stock in trade in the ordinary
course of business.
e. enter Into
partnership or other business unilaterally with any other person.
f. assign or transfer
his share or any interest in the Firm.
g. admit any person as a
partner in the Firm.
h. borrow any moneys for
or in the name of the Firm, or create any security or charge on the assets of
the Firm.
i. enter into any
contracts except contracts in the regular course of business of the Firm.
j. stand as a guarantor
or surety for any person in the name of the Firm or for and on behalf of the
Firm.
20.
The
parties shall open in the name of the Firm one or more accounts either current.
saving or overdraft or cash credit with one or more banks as may be agreed upon
by the partners and the account or accounts will be operated by the authorised
representatives of the parties hereto jointly.
21.
The
Partnership shall stand dissolved on the expiration of the said period of 3
years unless by mutual consent the period is extended by any additional period
in which event the partnership will continue on the same terms and conditions
as are herein contained subject to such modification as may be mutually agreed.
22.
Notwithstanding
anything herein contained to the contrary if any of the Party of the First Part
or the Party of the Second Part is or a majority of the partners of any of the
parties hereto are adjudged insolvent or dissolved for any reason, this
partnership will also stand dissolved.
23.
On
dissolution of the partnership hereby created accounts will be made of all
assets, debts, and liabilities and subject to payment of the debts and
liabilities, the net assets will be distributed between the parties, of the
First Part and of the Second Part in equal shares.
24.
This
partnership will be registered under the Income Tax Act, 1961, and the
Partnership Act, 1932 and the application for registration or a true certified
copy of this deed will be signed by all the partners of both the parties
hereto.
25.
If
any dispute or difference shall arise between the parties hereto touching the
business of the firm or Interpretation of any provision hereof or otherwise,
howsoever, relating to the Firm and its business, the same shall be referred to
arbitration of a common arbitrator if agreed upon, failing which to two
arbitrators one to he appointed by each party of the First Part and party of
the Second Part, to the arbitration and the arbitration shall be governed by
the Arbitration & Conciliation Act, 1996.
26.
This
Deed is executed In duplicate and one copy will remain with the Party of the
First Part and the other will remain with the Party of the Other Part.
IN WITNESS WHEREOF
the parties have put their respective hands the day and year first hereinabove
written.
Signed and delivered
for and on behalf of the Party of the First Part by its partners (1) ... (2)
... (3) ... In the presence of ...
Signed and delivered
for and on behalf of the withinnamed Party of the Second part by its partners
(1) ... (2)... (3) ... (4)... in the presence of.
