About Partnership Deed

A Partnership Agreement is an agreement between two or more individuals who would like to manage and operate a business together in order to make a profit. It is a relatively common business structure in India, and can be contrasted to other common business structures such as a sole proprietor, a company or a trust.

In a partnership, several partners are able to work together (unlike a sole proprietor). Each partner shares a portion of the partnership's profits and losses and each partner is personally liable for the debts and obligations of the partnership.

Compared to a company or a trust, a partnership can have lower set up and administration costs. However, while companies and trusts offer some protections against liability, a partnership does not. A partnership is not a separate entity from the partners. If the partnership incurs a liability, the partners are personally responsible for it. Furthermore, a partner can become liable for debts that another partner has incurred on behalf of the partnership.
Nevertheless, a partnership is a cheap and convenient way for a several people to go into business together, and is a popular business structure for many Indians. And an important step in getting the partnership established, is to make a written record of the agreement between the partners, by using this Partnership Deed.
This Partnership Deed describes the partner responsibilities, outlines the ownership interest in the partnership, defines the profit and loss distribution of each partner, prepares the partnership for common business scenarios, and includes other important rules about how the partnership will be managed and conduct business.
The document is a critical foundational document for running a new business and sets the business up for success by ensuring clear communication and defined responsibilities for all of the partners. This Agreement documents both contingency plans for when things go wrong as well as descriptions of the partnership's day-to-day operations. A Partnership Deed protects all of the partners involved in the business and any individuals who plan to do business together should complete a Partnership Deed.