between Two Limited Companies
This Deed of
Partnership is made at... on this.. day of.. between M/s. A B & Co. Pvt.
Ltd., a Company registered under the Companies Act, 1956. and having its
registered office at ... hereinafter referred to as the, Party of the First
Part. and M/s. X Y Z & Co. a Company registered under the said Act and
having its registered office at ... hereinafter referred to as the 'Party of
the Second Part'.
Whereas both the
parties of the First Part and of the Second Part are, under their respective
Memorandum of Association, entitled to carry on the business of producing
electricity and supplying the same to any area.
And Whereas both the
Parties of the First Part and Second Part are entitled to enter Into
partnership with any person or persons including a company for carrying on the
business authorised by their respective Memorandum of Association.
And Whereas the
parties hereto have proposed to set up in joint collaboration a plant to
produce electricity and supply the same to the town of ... and to enable them
to pool together their finances and technical expertise they have therefore
proposed to enter into a partnership.
And Whereas the
parties have obtained license or permission of the Govt. for producing and
supplying electricity to the said town.
And Whereas it is,
therefore, proposed to enter into this deed of partnership containing the terms
and conditions agreed upon between the parties.
Now it is agreed by
and between the Parties hereto as Follows:-
parties hereto agree to carry on the business hereinafter mentioned In
partnership on the terms and conditions herein mentioned, In the name and style
partnership shall commence from the ... day of... and the period of the
partnership shall be for a period of ten years from the date hereof. The said
period may be extended as the parties may by mutual consent decide.
business of the partnership (hereinafter referred to as the 'Firm') consist of
setting up a plant for manufacture or production of electricity on grid system
and to supply-the same to the town of .............
office of the partnership shall be at ................... The parties will open branches
at such other places as may be agreed upon.
parties 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 partner shall contribute more amount than Its share In the capital It will
be treated as a loan by it to the Firm carrying Interest at the maximum rate
allowable as deduction under the Income Tax Act.
net profits and losses of the Firm will be shared by the partners hereto in
equal shares or proportion. Net profit will mean gross profit earned in each
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 of the firm and all other expenses as may be
allowable as deduction under the Income Tax Act.
accounting year of the Firm will be from 1st April to 31st March of each
Christian calendar year.
the end of each accounting year an account of the business carried on 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 partners. The accounts will
be got audited by a Chartered Accountant every year.
Managing Director or any other authorised representative of each of the parties
hereto will represent his company on the Firm and for all practical purposes he
will be considered as the partner of this partner- ship.
books of accounts 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 partners
hereto at any time.
the working staff such as clerks, peons, accountants, cashier, technicians,
salesmen and others will be appointed by the joint consent of the parties
hereto and their wages and salaries and other emoluments will be fixed by
mutual consent of the parties hereto.
of the Parties hereto shall -
a. participate and
attend to the business of the Firm through their respective Managing Director
or authorised representative for the time being 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
e. attend to the
business of the Firm diligently and actively.
f. not withdraw any
amount for its own profit, benefit or use as remuneration or otherwise without
the consent of the other.
g. be entitled to be
indemnified by the Firm in respect of payment made and liabilities incurred by
the usual and proper course of business of the Firm. and
doing any act for protecting the Firm from loss in emergency.
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. In relation to the said business will belong to the Parties In
equal shares and the property of the Firm shall be used by the parties
exclusively for the business of the firm.
party shall account for the profits earned from any transaction of the Firm or
for the use of the property in business transaction of the Firm.
party hereto shall not, without the consent of the other and in respect of or
relating to the said partnership business,
a. submit any dispute
with any other person to arbitration or com- promise or relinquish any 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. assign or transfer
Its share or any Interest in the Firm, (f) admit any person as a partner In the
f. borrow any moneys for
or in the name of the Firm, or create any security or charge on the assets of
Parties shall open one or more accounts either current, saving or overdraft or
cash credit with one or more banks as may be agreed upon by the Parties and the
account or accounts will be operated by the Managing Director or other
authorised representative of each of the Parties hereto.
party hereto shall be entitled to dissolve the partnership before the
expiration of the said period aforementioned.
any party does not desire to continue the partnership or if any party goes Into
winding up voluntarily or through Court, the other party hereto will be
entitled to take over the entire business together with all assets and subject
to all liabilities at a valuation to be made through the Chartered Accountants
of the Firm and the share of the former Party will be paid by instalments as
may be agreed upon or decided by Arbitration.
the expiration of the said period of ten years or the extended period if any,
the business of the partnership together with its assets and liabilities will
be transferred to another company to be formed and registered jointly by the
parties hereto on such terms as may be agreed upon failing which the
partnership will be dissolved and the dissolution will be effected In terms of
the provisions of the Partnership Act, 1932.
any dispute or difference shall arise between the parties hereto touching the
business of the Firm or interpretation of any provision hereof, or otherwise.
however 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 be appointed by each party to the arbitration and the arbitration shall
be governed by the Arbitration & Conciliation Act, 1996.
parties shall. as early as possible but in any event within the prescribed
period get the Firm registered under the Partnership Act, 1932 and the Income
Tax Act. 1961.
In this Deed shall be constrained to prevent or disable any party hereto to
carry on any business in terms of Its Memorandum of Association anywhere except
the business of the partnership and no partner shall be entitled to have any
right or concern with the other business and internal management of the other.
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
Signed and delivered
for and on behalf of the withinnamed M/s. A B & Co. Ltd., by its Managing
Director, Mr ...... duly authorised In that behalf by the Board of Directors.
In the presence of ...
Signed and delivered
by the withinnamed M/s. X Y Z Co. Ltd., by Its Managing
Director Mr .... duly
authorised by the Board of Directors, Mr ........ In the presence of ...