Once you choose the right name, it’s time to prepare the partnership deed. The agreement has to contain all the terms and conditions as per the partners’ discretion. It is upto the choice of the partners, whether to keep certain things orally or written. However, it’s highly advisable to keep every clause written so that no space for future conflict remains. The written agreement should have the following things mentioned:
- Complete details of partners including name, address and other important details
- Nature of the business
- Name & Complete address of the firm
- Date of entering into an agreement, i.e., date of commencing the business;
- Partnership duration;
- Capital Contribution;
- Sharing ratio of profit and loss;
- Persons involved in the Management;
- Voting rights of partners;
- Tax Implications of Taxes;
- Dissolution;
- Interest on capital, loan, etc.;
- Withdrawal;
- Retirement, death, and admission;
- Salaries and commissions
You need to prepare the partnership deed on a stamp paper while paying the necessary stamp duty, as the Indian Stamp Act suggests.