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What is a Partnership Agreement?

A Partnership Agreement is a written agreement between two or more individuals who are undertaking a for-profit business as partners. Generally, the agreement outlines the business nature, objectives of the partnership, the individual contributions of the partners, rights, and responsibilities. Other terms that are often outlined in a Partnership Agreement include:

1. Length of the Partnership
2. Capital Contribution
3. Profit and loss distribution
4. Decision-making and dispute resolution process
5. Finances and taxing method
6. Termination of Partnership.

It is true that a valid partnership can exist without a written agreement, but creating one reduces potential disagreements or conflicts that can arise between partners. It also most definitely helps the business in itself as well.

Why do you need a Partnership Agreement ?

Clarity on Management's Roles and Duties
A Partnership Agreement clears the air regarding the roles and decision-making powers of every partner so that one’s decisions do not put everyone or the whole business at risk. It also gives clarity and clearly outlines the roles to reduce confusion and disagreements between the partners.
Establishes decision-making processes and voting rights
In the event of a dispute arising between the partners, it is important to establish voting rights at the outset itself. It may be equal rights and can depend on the contribution of each partner to the business, or any other way as decided by the partners.
Controls ownership through an entry plan and establishes an Exit Plan
A Partnership Agreement sets reasonable restrictions on the transfer and sale of interests in the company. It sets out who owns the business and enables partners to retain their percentage in the business and speaks about how and under what circumstances a new partner can enter the business. It will also define the exit plan for a partner, the way in which the partner can leave the business. It offers a plan for the dissolution of the business as well if the partners ever want to end operations.
Avoid Legal proceedings/liabilities
You might think that spending on the business partnership agreement itself can add to the cost of your startup or business cost, but this cost is much smaller and goes to the benefit of avoiding disputes so as to avoid paying hefty legal fees and constantly being involved in court proceedings, etc. The partnership agreement will also allow the partners to choose their pick on how to resolve a dispute either by mediation, arbitration, or negotiation.

Documents we need

The company name, its registered address and other such contact information.
The roles and responsibilities of each party to the partnership.
Information on the parties to the partnership along with their ID Proof

Important Clauses

Shareholding Pattern
The Share pattern of each partner to the agreement, along with their contributions to the partnership will be mentioned
Rights and Responsibilities
This clause will explain the rights and obligations of each of the partners to the agreement, so as to fulfill their role.
Liabilities of the Parties
This clause will explain the liabilities of the partners to the agreement to ensure that they understand everything beforehand.
Confidentiality clauses
This clause will specify if there is any confidential content or information that occurs through such agreement or company and the way in which it must remain confidential.
Profit and loss sharing ratio
This clause defines the method in which profits will be divided between the partners, among the employees and others, etc. It also defines the way in which losses are managed or paid off by the partners.
Dispute Resolution
This clause will speak of the jurisdiction for the dispute resolution, in case any need arises.

Why choose us


A dedicated Case Manager ensures quick turnout to all your queries and tailored solutions that fit perfectly for your requirements.


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Our team of dynamic professionals is well experienced and extremely proficient to cater to your needs, ensuring the best service.


We are available to address and clarify all your queries round the clock. So you can worry less and focus more on the business.

Frequently Asked Questions

Registration of a Partnership is not necessary. However, unless a partnership firm is registered with the registrar of firms, the rights of the partners cannot be enforced in a court of law.
When the partnership deed does not contain any provision for the duration of the partnership nor conditions for the termination of partnership, it is a partnership at will.
Yes. If the number of partners is more than 20, it has to be registered as a company.
A Limited Liability Partnership is a legal entity separate from its partners and therefore, offers limited liability to its partners whereby any liability of the LLP will be borne by the assets of the LLP. However, in the case of a general partnership, the partners are jointly and severally liable for each liability of the partnership firm.