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 centers 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.             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. In relation to the said business 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. 
14.             Every party shall account for the profits earned from any transaction of the Firm or for the use of the property in business transaction of the Firm. 

15.             Any party hereto shall not, without the consent of the other and in respect of or relating to the said partnership business, 

(a)               submit any dispute with any other person to arbitration or com- promise or relinquish any 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)               assign or transfer Its share or any Interest in the Firm, (f) admit any person as a partner In the Firm, 

(f)                 borrow any moneys for or in the name of the Firm, or create any security or charge on the assets of the Firm, 

16.             The Parties shall open 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 the Managing Director or other authorised representative of each of the Parties hereto. 

17.             No party hereto shall be entitled to dissolve the partnership before the expiration of the said period aforementioned. 

18.             If any party does not desire to continue the partnership or if any party goes Into winding up voluntarily or through Court, the other party hereto will be entitled to take over the entire business together with all assets and subject to all liabilities at a valuation to be made through the Chartered Accountants of the Firm and the share of the former Party will be paid by installments as may be agreed upon or decided by Arbitration. 

19.             On the expiration of the said period of ten years or the extended period if any, the business of the partnership together with its assets and liabilities will be transferred to another company to be formed and registered jointly by the parties hereto on such terms as may be agreed upon failing which the partnership will be dissolved and the dissolution will be effected In terms of the provisions of the Partnership Act, 1932. 

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

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

22.             Nothing In this Deed shall be constrained to prevent or disable any party hereto to carry on any business in terms of Its Memorandum of Association anywhere except the business of the partnership and no partner shall be entitled to have any right or concern with the other business and internal management of the other. 

23.             This Deed is executed in duplicate and one copy will remain with the Party of the First Part and the other will remain with the Party of the Other Part. 

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

Signed and delivered for and on behalf of the within named M/s. A B & Co. Ltd., by its Managing Director, Mr ...... duly authorised In that behalf by the Board of Directors. In the presence of ... 

Signed and delivered by the within named M/s. X Y Z Co. Ltd., by Its Managing 

Director Mr .... duly authorised by the Board of Directors, Mr ........ In the presence of ...