Partnership between three Partners
THIS DEED OF PARTNERSHIP is made the . . . . . . . . . . day of . . . . . . . . . . , 20 . . . . ., BETWEEN A. B., aged . . . . . . . . . . , etc. (hereinafter called the ‘‘First Party’’) of the first part AND C. D., aged . . . . . . . . . . , etc. (hereinafter called the ‘‘Second Party’’) of the second part AND E. F. aged . . . . . . . . . . , etc. (hereinafter called the ‘‘Third Party’’) of the third part; AND WITNESSES that each of the said parties hereby covenant with the others of them jointly and severally in the manner following, that is to say:
1. The said A. B., C. D. and E. F. shall become and henceforth continue as partners in the trade or business hereafter to be known as . . . . . . . . . . for the term of. . . . . . .from the date hereof, if the said partners or any two of them shall so long live, subject to the provisions regarding dissolution of this partnership hereinafter contained.
2. That the business of the partnership shall be . . . . . . . . . . and shall be carried on from . . . . . . . . . . Road . . . . . . . . . . and from such other place or places as the partners may from time to time determine.
3. If at any time before the expiration of the period fixed in Para 1 above any partner desires to retire from the business, he may do so by giving at least six months’ notice expiring with the date of annual accounting. The retirement of any one member shall not ipso facto determine the partnership.
4. A partner shall be deemed to retire from the partnership in the event of any one or more of the following events taking place:
(a) Continued neglect or absence from the business of the partnership without cogent reasons for a period exceeding . . . . . . . . . months.
(b) Sickness or physical injury incapacitating the partner for more than . . . . . . . . . . months.
Retirement under this clause shall take effect on the expiry of a notice sent by the partnership to the defaulting member at his address recorded in the books of the partnership.
5. The capital of the partnership shall be the sum of Rupees . . . . . . . . (Rs. . . . . .) only, to be contributed as follows:
|First Party contributing||Rs . . . . . . . . . .|
|Second Party contributing||Rs. . . . . . . . . . .|
|Third Party contributing||Rs. . . . . . . . . . .|
6. The said partners shall be entitled to the net profits in the proportion of their shares AND all losses happening in the course of the said business shall be borne by the said partners in the proportion of their shares, unless the same shall be occasioned by the wilful breach of any covenant, stipulation or provision herein contained, or other neglect or default on the part of either of the said partners, in which case the same shall be made good by the partner or partners through whose breach, neglect or default, the same shall arise.
7. The partnership may at a meeting called for the purpose or after mutual consultation increase the capital. There shall, however, be no compulsion on any partner to contribute more than he desires. In the event of an increase in the capital, the profit or loss as the case may be will continue to be shared in the proportion of the individual contribution of the partners.
8. The bankers of the partnership shall be the . . . . . . . . . Bank or such other bankers as the partners may from time to time determine; and all partnership money (not required for current expenses) shall be paid into the account of the firm. Every year the firm shall elect two partners who shall operate the account of the partnership at the Bank or Banks and such partners shall for the year or till the next election continue to operate and deal with the moneys of the partnership in the Bank or Banks. Information regarding election of such partners shall be conveyed to the Bank or Banks by a letter signed by all the partners. All moneys and transactions with the Bank or Banks shall be done on the joint signatures of such elected partners.
9. The partners shall be entitled to be paid for their own use respectively, any sum or sums not exceeding the sums following, that is to say:
First Party, the sum of Rs . . . . . . . . . per month liable to be proportionately increased or decreased on change of his contribution in the event of a change in the capital.
Second Party, the sum of Rs . . . . . . . . . per month liable to be proportionately increased or decreased on change of his contribution in the event of a change in the capital.
Third Party, the sum of Rs . . . . . . . . . per month liable to be proportionately increased or decreased on change of his contribution in the event of a change in the capital.
Such sums to be duly accounted for by them respectively on the taking of every such general annual or six-monthly account as hereinafter directed, and any partner whose drawings shall, on the taking of such account, be found to exceed his share of the net profits for the previous year, shall forthwith refund the difference. On failure of refund his contribution to the capital shall to such extent be deemed to have been decreased.
10. All servants, apprentices, clerks, labourers and employees shall be engaged by and dismissed with the consent of all the partners acting through any one or more partners expressly authorised in this behalf in writing.
11. The partners shall be true and just to each other in all their transactions and dealings; and shall, at all times during the continuance of the partnership, diligently and faithfully employ themselves in the conduct and management of the said business and the concerns of the partnership.
12. None of the partners shall, during the continuance of the partnership, without the consent in writing of the other partners, personally engage in or carry on or be concerned or interested directly or indirectly, in the trade or business then being carried on by the partnership.
13. All acts, deeds and things done by the partnership shall be done by mutual consent and no partner shall be authorised or be at liberty to pledge, hypothecate or encumber the property, assets or stock-in-trade of the firm without the consent in writing of the others. All loans to be binding on the firm shall be required to be executed and signed by all the partners personally or through their attorneys duly appointed in this behalf.
14. The partners respectively shall keep or cause to be kept proper books and accounts, wherein shall be entered all moneys received and paid and all contracts entered into, and all business transacted on account of the partnership, and all other matters and things of which accounts ought to be kept, according to usual and regular course and practice and all books of account, deeds and securities for moneys, vouchers, letters and correspondence belonging or pertaining to the partnership shall be kept at the place or places where the business of the partnership may from time to time be conducted, if the same be not lodged with the branches of the partnership. All records of the partnership, whether current or otherwise, shall be open to inspection by all the partners.
15. Immediately after each . . . . . . . . . day of . . . . . . . . . in every year or six-monthly as may be agreed upon the partners shall take an account and valuation of the effects, credits and liabilities of the partnership. Such accounts and valuation shall after mutual examination be drawn up in as many copies as there are partners and shall be signed by all the partners in token of their acceptance as final and binding. All the partners shall sign the copies and each partner shall retain one signed copy. All moneys paid under Clause 9 above to the partner will be adjusted in such annual or six-monthly accounts and in case of the payments exceeding the share of profits the procedure outlined in Para 9 above shall be followed.
16. In the event of the death or bankruptcy of any member, the partnership shall not ipso facto determine. It shall be competent for the remaining members to admit the legal representative or representatives of any deceased partner. Bankruptcy of any member shall only operate as retirement of that member.
17. In the event of retirement or death of any member and the non-admission of any legal representative of such deceased member the share of such member shall be paid to such person entitled to receive on his behalf and capable of giving an effective discharge to the partnership after the first annual or six-monthly accounting between the partners. It shall, however, be open as a first choice to any member to purchase the share of any member on such value as may be agreed between the retiring member or his legal representative and if no mutual agreement is possible the member desirous of purchasing the share may do so on such valuation as may be fixed by arbitrators or their umpire appointed by parties to the transaction and the remaining members.
18. In the event of a dissolution of the partnership by any means whatsoever, as soon as convenient, but not later than the time fixed for the annual or six-monthly accounting a full and general account and valuation shall be taken of the property, assets and liabilities of the partnership and the same sold by public or private auction, the debts realised and the credits paid. The net proceeds in cash shall be rateably divided according to the share of each partner between all the partners or the partners and the legal representative or representatives of any deceased partner: PROVIDED ALWAYS that if the proceeds are less than the liabilities the loss shall be made good in the proportion of the shares by the partners or their legal representative or representatives.
19. No retiring partner shall, during the unexpired residue of the partnership term then remaining unexpired, commence, or carry on, or engage or be interested, directly or indirectly in the trade or business of the partnership then being carried on in the State or States in which the partnership may be conducting its business.
20. All notices herein expressed to be given by any member to another or by the partnership to any member shall be given or sent by registered post at the address herein mentioned or such other address as may be recorded with the Registrar of Firms AND no notice shall be of less than 15 clear days.
21. In the event of a breach of any condition of this partnership the defaulting partner may by notice be expelled but in case of a breach of conditions laid down in Paras 12 and 19 the defaulting partner shall only be liable to pay liquidated damages to the extent of Rs . . . . . . . . . only.
22. In all matters relating to the management and conduct of the day-to-day business of the partnership the unanimous decision of the partners shall be preferable, but in case this is not possible notwithstanding anything herein contained to the contrary, the decision of a majority in value of the partners shall be conclusive and binding on all the partners.
23. Subject to the provision contained in the last preceding clause, if at any time any dispute, doubt or question shall arise between the said partners or their respective legal representatives, either on the construction of these presents or respecting the accounts, transactions, profits or loss of the business or otherwise in relation to the partnership, then any such dispute, doubt or question shall be referred to a panel of arbitrators appointed by each of the partners or their legal representatives, or by the umpire to be appointed in the manner provided by law and all proceedings before such arbitrators or the umpire shall be governed by the provisions contained in the Arbitration Act, 1940, or any statutory modification thereof.
IN WITNESS whereof the said A. B., C. D. and E. F. have hereto at . . . . . . . . ., signed on the day and year first written.
Witness: Sd. A. B.
Sd. C. D.
Sd. E. F.