Business Partnership Agreement
Going into business together? Document capital, profit sharing, duties and exits before the handshake fades.
- Contribution Clarity
- Profit Sharing Settled
- Authority Boundaries
What is Business Partnership Agreement?
Business partnerships built on trust alone end in disputes built on memory. A partnership agreement (or partnership deed, when you run a partnership firm) writes down what each partner contributes, how profits and losses split, who decides what, how new partners join and — most importantly — how someone leaves without destroying the business.
Taxwapsi's lawyers draft agreements covering capital contributions and interest, profit/loss ratios, partner remuneration (within Section 40(b) limits for tax deductibility), roles and authority limits, banking powers, admission and retirement, death/incapacity succession, dispute resolution and dissolution mechanics.
Whether it is a registered partnership firm deed, an unregistered business collaboration, or a revenue-sharing arrangement between two companies — we structure the document to match the legal form you actually need.
Expert Pro Tip
Set partner remuneration and interest-on-capital clauses exactly per Section 40(b) of the Income Tax Act — without these written in the deed, the firm legally cannot deduct partner salary or interest, inflating your tax bill every single year.
Choose Your Package
Transparent pricing — professional fee shown, government fees extra where noted.
Starter
Standard partnership deed.
+ Stamp Duty
Get StartedWhat you'll get
- Comprehensive deed drafting
- 40(b)-compliant remuneration clauses
- Exit & succession provisions
- 2 rounds of revisions
- Stamping guidance
Standard
Deed + firm registration + PAN.
+ Govt. Fee
Get StartedWhat you'll get
- Everything in Starter
- Registrar of Firms filing (Form 1)
- Firm PAN application
- Bank account documentation
- GST registration guidance
Pro
Complete partnership launch + first-year tax.
+ Govt. Fee
Get StartedWhat you'll get
- Everything in Standard
- GST registration included
- MSME/Udyam registration
- Firm ITR-5 filing (1 year)
- Supplementary deed (1) if terms change
- Dedicated expert support
* Timelines depend on government processing. T&C apply.
Benefits of Business Partnership Agreement
Contribution Clarity
Capital, assets, skills and time each partner brings — valued and recorded.
Profit Sharing Settled
Ratios, remuneration and interest on capital documented — tax-deductible under 40(b) when drafted right.
Authority Boundaries
Who signs cheques, who hires, what needs unanimous consent — overreach prevented by design.
Exit Without Destruction
Retirement, buyout valuation, goodwill treatment and non-solicitation on exit pre-agreed.
Succession Planning
Death/incapacity provisions so the business survives the partner.
Dispute Mechanism
Mediation/arbitration clauses that resolve conflicts without killing the firm.
How It Works — Step by Step
- 1
Partnership Structuring CallDay 1
Contributions, ratios, roles and exit expectations discussed — structured by our checklist.
- 2
Deed/Agreement DraftingDay 2
Complete document drafted with tax-optimised remuneration and all governance clauses.
- 3
Review & RevisionsDay 3
All partners review; revisions incorporated (2 rounds included).
- 4
Stamping & Registration GuidanceDay 4
State stamp duty, notarisation and (optional but recommended) Registrar of Firms registration support.
Documents Required
Prepare your documents in the order below — start with Document 1 and move down the list.
Partner Details
- 1
Partner KYCRequired
PAN and Aadhaar of all partners.
- 2
Capital ContributionsRequired
Cash/asset contribution of each partner.
- 3
Profit Sharing IntentRequired
Proposed ratios — we stress-test against contributions.
Business Details
- 4
Business Name & NatureRequired
Firm name (we check trademark conflicts) and activities.
- 5
Place of BusinessRequired
Principal address for the deed and registrations.
- 6
Banking ArrangementsIf applicable
Operating authority preferences for the bank account.
Frequently Asked Questions
Partnership deed vs partnership agreement — same thing?
Practically yes for a partnership firm — the deed is the agreement that constitutes the firm under the Partnership Act, 1932. "Partnership agreement" is also used loosely for collaborations between companies, which are legally different (contractual JVs). We draft the correct instrument for your structure.
Should we register the partnership firm?
Strongly recommended. Under Section 69, an unregistered firm cannot sue third parties to enforce contracts, and partners cannot sue each other or the firm for their rights. Registration with the Registrar of Firms is one-time and inexpensive relative to that risk.
How is partner remuneration taxed?
Remuneration to working partners is deductible to the firm within Section 40(b) limits (on book profit slabs) — but only if the deed expressly authorises it with quantification. The partner pays tax on it as business income. Interest on capital is similarly capped at 12%. We draft these clauses tax-perfect.
Can profit sharing differ from capital ratio?
Yes — completely. A partner contributing skill and time can hold a larger profit share than their capital suggests, and the deed governs. What matters is documenting it expressly to prevent later "equal by default" claims.
What happens when a partner wants out?
The deed should provide notice periods, valuation methodology (book value/multiplier/valuer), payment schedule for the outgoing partner, goodwill treatment, liability for past acts and reconstitution of the firm. Without these, retirement triggers dissolution chaos.
What if a partner dies?
By default, death can dissolve the firm. A continuation clause lets surviving partners continue, with the deceased partner's account settled with legal heirs (or a nominee admitted). Essential for business continuity — we always include it.
Can a partner run a competing business?
The Act bars partners from competing with the firm and requires accounting for secret profits. The deed should reinforce this with explicit conflict, non-compete (during partnership — enforceable) and non-solicitation terms.
What stamp duty applies to a partnership deed?
State-specific, often linked to capital — typically ₹500 to ₹5,000 (e.g. capital-based slabs in Maharashtra). Correct stamping is mandatory for admissibility. We compute and arrange the right value for your state.
What Our Clients Say
4.6/5(2,000+ reviews)Our trademark got objected and we were clueless. Their IP attorney drafted a brilliant reply — mark accepted and published within months.
My freelancer agreement now has milestone payments and IP-on-full-payment. A client who used to delay invoices paid in 4 days this time.
My Pvt Ltd was registered in 12 days flat. Every step explained, pricing exactly as quoted, and the post-incorporation kit covered everything. Highly recommended.
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