PARTNERSHIP AGREEMENT BETWEEN TWO PARTNERSHIP FIRMS

THIS DEED OF PARTNERSHIP Is made at ... on this... day of... Between M/ s A B & Co. a partnership firm consisting of (1)... (2)... (3)... partners and carrying on business at ... hereinafter referred to as the Party of the First Part and M/s. X Y & Co. a partnership firm consisting of (1) (2) ... (3).... (4).... as partners and carrying on business at ... hereinafter referred to as the Party of the Second Part, as follows 

WHEREAS the Party of the First Part Is carrying on business at ... and the business consists of ... 

AND WHEREAS the Party of the Second Part is carrying on business at... and the business consists of .

AND WHEREAS the parties hereto have proposed to commence and carry on a third business In partnership on the following terms and conditions and have proposed to execute this Deed. 

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 mentioned, in the name and style of M/s .... 

2.                  The Partnership shall commence from the .... day of .... 19 ... and the period of the partnership shall be for three years from the date hereof. 

3.                  The business of the partnership (hereinafter referred to as the 'Firm') shall consist of ... only and no other business shall be undertaken by the Firm except by mutual consent of all the partners. 

4.                  The Office of the partnership shall be at ... The parties may open branches at such other places as they may be agreed upon. 

5.                  Each of the parties of the First and Second Parts have contributed towards the initial capital of the firm a sum of Rs... In equal ... shares. The partners will contribute such further amounts towards the capital of the firm in equal .... shares as may be required from time to time. If any party of the First or Second Part or any partner of any of the said partnership individually shall contribute more amount than its share in the capital, it will be treated as a loan by that party to the Firm. The amounts of capital contributed or loans advanced by any partner or partners will carry Interest at the rate of 1 8% per annum or at such maximum rate as may be allowable as deduction from gross Income under the Income Tax Act for the purpose of calculating taxable income. 
6.                  The net profits and losses of the firm will be shared by the parties of the First and Second Parts in equal shares or proportion. Net Profit will mean the gross profits earned in such year less the expenses of the management of the business including the rent of the premises of the firm Including outgoings In respect of the salaries and wages of the staff, commission paid to others, and all other expenses incurred In connection with the business. The share in the net profits and/or losses of each partner of the First Part and of the Second Part will be shared or distributed among the partners of each of the partners of the First and Second Part according to the partnership agreements between the partners of each of the parties hereto of the First and Second Part recorded in the deeds of partnership of their respective partnerships above mentioned. 

7.                  The accounting year of the Firm will be from 1st April to 31st March of each Christian calendar year. 

8.                  At the end of each accounting year an account of the business carried on by the Firm 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 authorised representatives of each party hereto. If necessary or required by law the accounts will be got audited by a Chartered Accountant. 

9.                  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 authorised representatives of the parties hereto at any time. 

10.             The Party of the Second Part will look after the financial side of the work as well as look after the administration of the Firm and its said business. 

11.             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 partners hereto at any time. 

12.             All the working staff such as clerks, peons, accountants, cashier, salesmen and others and the technical staff will be appointed by the joint consent of the partners hereto and their wages and salaries and other emoluments will he fixed by mutual consent of the parties hereto. 

13.             Subject to what Is otherwise provided herein, each of the partners- 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 willful negligence or fraud in the conduct of the business. 

(e)               Not carry on any business similar to the business of the Firm or any other business anywhere 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 own profit, benefit or use as remuneration or otherwise without the consent of the other. 

(g)               be entitled to be indemnified by the Firm in-respect of payment made and liabilities incurred by him- (i) in 'the ordinary and proper course of business of the firm and (ii) in doing any act for protecting the Firm from loss In emergency. 

14.             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 but subject to the debts and liabilities of the Firm and the property of the Firm shall be used by the parties exclusively for the business of the firm. 

15.             Every party shall account for the profit earned from any transaction of the Firm or for the use of the property of the Firm. 

16.             At the end of every six months, the Party of the Second Part will be entitled to withdraw such amount as the funds of the Firm will permit, towards repayment of the principal amount of loan advanced by the Party of the Second Part to the Firm. 

17.             Any party hereto shall not, without the consent of the other- 

(a)               submit any dispute with any other person to arbitration or compromise 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. 

18.             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 partners and the account or accounts will be operated by any one of the parties hereto. 

19.             The Partnership shall continue till the completion of the said work of construction or If by any chance the said construction contract is cancelled for any reason, till the cancellation of such contract and till then none of the parties shall be entitled to dissolve the partnership or to retire from the partnership. 

20.             If and when the partnership is dissolved, an account of the assets and property and list will be made up to the date of dissolution and out of the assets in specie or by sale thereof, all debts and liabilities including the loan advanced by the Party of the Second Part will be paid In priority and if any balance will remain the same will be shared by the Parties hereto in equal shares. 

21.             If the said construction contract Is cancelled by any party thereto and there Is a claim by or against the Firm In respect thereof, the same will be prosecuted or defended by both the parties hereto and the winding up of the partnership will be deemed to continue until such claims are finally disposed of by arbitration or court proceedings. 

22.             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. howsoever 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 dispute and the arbitration shall be governed by the Arbitration & Conciliation Act. 1996. 

23.             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. 

24.             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 by the within named Mr. A In the presence of ................ 

Signed and delivered by the within named Mr. B In the presence of ..................