Partnership Agreement
between an Individual, a Partnership Firm and a Company

This Deed of
Partnership Is made at … on this … day of… between Mr. ‘A’ residing at
… hereinafter referred to as the ‘Party of the First Part’ M/s. A B & Co.
a Partnership firm, consisting of (1) ….. (2) ….. and (3) ….. as partners
and having their office at… hereinafter referred to as ‘the Party of the
Second Part’. and M/s. X Y Z Co. Pvt. Ltd., a Company registered under the
Companies Act, 1956, and having registered office at … herein- after referred
to as ‘the Party of the Third Part’.

Whereas the Party of
the First Part has registered a Patent bearing Registration No… In his name
which is intended to manufacture several products mentioned in the Schedule
hereunder written. The Party of the First Part As, however, handicapped for
want of finance.

And Whereas the Party
of the Second Part is carrying on business of sales agents and has gained lot
of experience in salesmanship.

And Whereas the Party
of the Third Part is carrying on several businesses including that of financing
and has also factory premises which can be used for manufacturing the said
products.

And Whereas the
parties, under the circumstances, have come together and decided to do business
in partnership with a view to exploit, the said Patent to the maximum extent
for the benefit of all of them on the following terms & conditions.

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 contained, in the name and style
of M/s…………………..

2.    
The
partnership shall commence from the … Day of… And the period of the
partnership will he at Will.

3.    
The
business of the partnership (hereinafter referred to as ‘the Firm’) shall
consist of manufacturing, buying and selling the products mentioned In the
Schedule hereunder written, with the help of the Patent rights acquired by the
Party of the First Part.

4.    
The
office of the partnership shall be at … The Parties may open branches at such
other places as may be agreed upon.

5.    
The
Parties of the First, Second and Third Part have contributed equally a token
capital of Rs… Each. All the finance required to carry on the business will be
supplied by the Parties of the Third Part and that Party will be entitled to
charge interest thereon at 18 per cent per annum or at such maximum rate as may
be allowable under the Income Tax Act. The Parties may also agree to borrow any
moneys from any Bank or other financial Institution.

6.    
The
Party of the First Part agrees to make available and to grant a formal license
to the partnership to use and exploit the said Patent no… Together with all
plans. Models and drawings relating thereto during the subsistence of the
partnership and the license will not be terminable so long as the firm
continues whether the party of the first part is a partner thereof or not.

7.    
The
Party of the Second Part agrees to undertake the work of selling the products
as well as to buy all raw materials required for the same and for that purpose
agrees to utilise all the services of Its subagents and distributors engaged in
the other businesses carried on by the Party of the Second Part and to allow
the use of its depots and selling centres at different places. The Party of the
Second Part will be entitled to charge separately commission at the rate of …
Per cent for the sale of the products but will not be entitled to charge
separately overhead expenses incurred for effecting such sales.

8.    
The
Party of the Third Part agrees to allow the partnership to use the premises of
the factory of the Party of the Third Part situate at … And for which the
Partnership will pay a nominal rent of Rs… Per month. The Party of the Third
Part will also make available the use of the machinery. Electric power and
other amenities available for the manufacture of the said products.

9.    
Nothing
herein contained will prevent the parties of the Second an Third Part from
carrying on their respective businesses at present carried on or that may
hereinafter be undertaken.

10. 
The
Party of the First Part will, however, exclusively devote his skill, knowledge
and time in the manufacture of the said products.

11. 
If
any capital assets are purchased or otherwise acquired by the Firm, they will
belong to the Parties in equal shares.

12. 
So
far as the Party of the Second Part is concerned it will be represented by any
one of the partners thereof authorised by the other partners and will have only
one vote in the meeting of the partners.

13. 
The
Party of the Third Part will be represented by its Managing Director or any
other person duly authorised for the time being.

14. 
The
net profits and losses of the firm will be shared by the Parties hereto in
equal shares or proportion. Net Profit will mean gross profit earned in such
year less the expenses of the management of the business including the rent of
the premises of the firm the outgoings in respect of the salaries and wages of
the staff, administrative expenses, commission paid to others and all other
expenses Incurred In connection with the business of the firm and expenses that
will to be allowed to be deducted under the Income Tax Act, 1961. The share in
the profits and losses of the Party of the Second Part in the Firm will belong
to each of the Partners of that Party in the same proportion as provided in the
deed of partnership of the Party of the Second Part.

15. 
The
accounting year of the Firm will be from 1st April to 31st March of each
Christian Calendar Year.

16. 
At
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. If necessary or
required by law the Accounts will be got audited by a Chartered Accountant.

17. 
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 parties hereto
at any time.

18. 
All
the working staff such as clerks, peons, accountants, cashier, 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.

19. 
Subject
to what As otherwise herein provided, each of the Party hereto 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 without the consent of the other
partner/s.

f.     attend to the
business of the Firm diligently and actively,

g.    not withdraw any
amount for his or Its own profit benefit or use as remuneration or otherwise
without the consent of the other,

h.     be entitled to be
indemnified by the Firm in respect of payments made and liabilities incurred by
him –

i.      in the usual and
proper course of business of the Firm, and

j.      in doing any act for
protecting the Firm from loss in emergency.

1. 
 

2. 
 

3. 
 

4. 
 

5. 
 

6. 
 

7. 
 

8. 
 

9. 
 

10.   

11.   

12.   

13.   

14.   

15.   

16.   

17.   

18.   

19.   

20. 
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 In equal shares and the property of the
Firm shall be used by the parties exclusively for the business of the firm. The
rights of the party of the First Part in respect of the said Patent will
continue to belong to that Party and the Firm will he entitled to the user’s
rights in respect thereof during the subsistence of the partnership.

21. 
Every
Party shall account for the profit earned from any transaction of the Firm or
from the use of the property in business transaction of the Firm.

22. 
The
Party of the First Part will be entitled to draw every month a sum of Rs… or
such other amount as may be agreed between the parties from time to time and
allowable under the Income Tax Act as deduction and the said amount will be
exclusive of his share in the net profits of the Firm.

23. 
Any
Party hereto 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,

1. 
 

2. 
 

3. 
 

4. 
 

5. 
 

6. 
 

7. 
 

8. 
 

9. 
 

10.   

11.   

12.   

13.   

14.   

15.   

16.   

17.   

18.   

19.   

20.   

21.   

22.   

23.   

24. 
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 Parties and the account or accounts will be operated by any two of the
Party of the First Part, the authorised partner of the Party of the Second Part
and the Managing Director or other authorised person of the Party of the Third
Part.

25. 
If
any party hereto desires to retire from the Firm he shall give to the others at
least three months’ previous notice to that effect and on the expiration of the
notice period, the Party shall be deemed to have retired. No one Party hereto
shall be entitled to dissolve the partnership.

26. 
If
any partner retires from the Firm he will not be entitled to carry on the same
or similar business as that of the Firm, within an area of two kilometres from
the office of the Firm and for a period of two years from the date of
retirement and he shall not carry on any business in the same name as that of
the Firm. until the partnership Firm is fully dissolved and wound up.

27. 
The
winding up of the Party of the Third Part (voluntarily or by order of the
Court) or the insolvency of the Party of the Third Part. will not dissolve the
Firm but such party on winding up or insolvency will cease to be a partner
hereof and shall be deemed to have retired from the Firm.

28. 
Notwithstanding
any thing herein contained to the contrary a retiring partner or its legal
representatives shall not be entitled to make any claim for the goodwill of the
Firm.

29. 
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,
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 arbitrators
one to be appointed by each party to the arbitration and the arbitration shall
be governed by the Arbitration & Conciliation Act, 1996.

30. 
The
parties shall, as early as possible, but in any event within the prescribed
period get the Firm registered under the Partnership Act, 1932, as well as
under the income Tax Act. 1961.

31. 
This
Deed is executed in triplicate and one copy will remain with each of the Party
of the First Part, the Party of the Second Part and the Party of the Third
Part.

IN WITNESS WHEREOF
THE parties have put their respective hands the day and year first hereinabove
written.

Signed and delivered
by withinnamed party of the First Part Mr. A In the presence of …

Signed and delivered
by the withinnamed party of the Second Part by its

partners 1 ….
2…..3….. in the presence of …

Signed and delivered
for & on behalf of the withinnamed Party of the Third Part by its Managing
Director Mr. in the presence of …

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