Partnership Deed in India: Format and Registration (2026)

Format · Business Drafting

Updated for 2026 · Claw Editorial

A partnership deed is the written agreement between the partners of a firm. It records who the partners are, how much each contributes, how profits and losses are shared, and how the business will be run and, if needed, closed. It is governed by the Indian Partnership Act, 1932. Registration of the firm is not compulsory, but an unregistered firm loses important rights in court, so most serious firms register. This page explains what a partnership deed must contain, why registration matters, the clauses that prevent disputes, a usable format, and what happens when partners fall out. Last verified October 2026.

01What a partnership deed is

A partnership is a relationship between persons who agree to share the profits of a business carried on by all or any of them acting for all. The partnership deed is the written contract that sets out that relationship. Under the Indian Partnership Act, 1932, a partnership can exist even without a written deed, but a written, signed and stamped deed is strongly advised, because it is the document everyone relies on if there is a disagreement.

The deed should be on stamp paper of the value set by your state, signed by all partners, and kept by each of them. If the partners also decide to register the firm, the deed is the main document filed with the Registrar of Firms. This is different from a company, which is registered under separate law; for that route, see how to register a company in India.

02Why registering the firm matters

Registration of a partnership firm with the Registrar of Firms is optional under the Indian Partnership Act. But Section 69 attaches serious disadvantages to an unregistered firm:

• Section 69(1): a partner of an unregistered firm cannot sue the firm or the other partners to enforce a right under the deed or the Act. If a co-partner cheats you and the firm is not registered, you cannot take that claim to court.
• Section 69(2): an unregistered firm cannot sue a third party to enforce a contract made in the course of its business. A genuine unpaid invoice may become unenforceable in court.
• Section 69(3): there are limited exceptions, such as a suit for dissolution of the firm or for accounts, and claims that rest on a statutory or common-law right rather than a contract.

Importantly, a third party can still sue an unregistered firm. So non-registration mainly hurts the firm and its partners, not outsiders. Because of this, most firms register, either at the start or before they need to enforce anything. Registration can usually be done at any time, but you cannot cure the bar for a suit already barred by simply registering later.

03Clauses that prevent disputes

Most partner fights can be traced to a deed that was silent on the point. Cover these clearly:

• Capital: how much each partner brings in, and whether it earns interest.
• Profit and loss sharing: the exact ratio for both profit and loss.
• Salary or remuneration: what working partners are paid, within the limits allowed for tax.
• Duties and powers: who manages what, and which decisions need the consent of all.
• Bank and borrowing: who can operate the account and borrow for the firm.
• Admission and retirement: how a new partner joins, and how a partner retires or is expelled.
• Death and continuation: whether the firm continues on a partner's death, and how the share is settled.
• Dispute resolution: an arbitration clause can keep disputes out of long court battles; see the arbitration clause format.

04A usable partnership deed format

Below is a general partnership deed format for a two or more partner firm. Adapt the names, shares and terms to your business, put it on stamp paper of the value set by your state, and have all partners sign before witnesses.

PARTNERSHIP DEED

This Deed of Partnership is made on this ____ day of __________
20____

BETWEEN
1. [Full name], resident of ____________________;
2. [Full name], resident of ____________________;
(hereinafter together the PARTNERS).

The Partners agree to carry on business in partnership on these
terms:

1. NAME: the firm shall be known as M/s ____________________.

2. BUSINESS: the firm shall carry on the business of __________
   at ____________________ and such other places as agreed.

3. COMMENCEMENT AND DURATION: the partnership begins on __________
   and shall be [at will / for a term of ____ years].

4. CAPITAL: the Partners shall contribute capital as follows:
   [Name] Rs __________; [Name] Rs __________.
   Interest on capital shall be [___% per year / nil].

5. PROFIT AND LOSS: profits and losses shall be shared as:
   [Name] ____%; [Name] ____%.

6. REMUNERATION: working partners shall be paid Rs __________
   per month / as mutually agreed within the limits allowed by law.

7. BANK: the firm account shall be operated by __________.

8. BOOKS OF ACCOUNT: proper books shall be kept at the firm's
   office and be open to every Partner.

9. ADMISSION, RETIREMENT, DEATH: a new Partner may be admitted
   only with the consent of all. A Partner may retire on ____
   months' notice. On death or retirement, the firm [shall / shall
   not] continue, and the outgoing share shall be settled as per
   the accounts.

10. DISPUTES: any dispute between the Partners shall be referred
    to arbitration under the law in force.

IN WITNESS WHEREOF the Partners have signed this Deed on the date
first written above.

________________              ________________
   PARTNER 1                       PARTNER 2

WITNESSES:
1. Name, signature __________
2. Name, signature __________

To register the firm, file the prescribed statement and this deed with the Registrar of Firms for your state, with the fee.

05When partners fall out

When partners cannot work together, the deed decides what happens next. A partner may retire or be expelled on the terms in the deed, or any partner may seek dissolution of the firm. On dissolution, the assets are sold, the debts and the partners' dues are paid, and anything left is shared in the agreed ratio. Even an unregistered firm can file a suit for dissolution or for accounts under the exception in Section 69(3), so a partner is not completely without a remedy.

Disputes commonly arise over unpaid shares of profit, a partner drawing more than allowed, a partner competing on the side, and what a departing partner is owed. A clear deed, proper books and, where agreed, arbitration keep these from turning into long litigation.

06Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

Partnership disputes often turn on how courts have read the Partnership Act and similar deeds: whether an unregistered firm could sue, how a share on retirement was valued, or whether a partner breached a duty. Claw lets you search 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, to see how courts have treated partnership questions like yours, with results in under 5 seconds. If a dissolution or accounts suit is already filed, Claw tracks cases, orders and hearings across 9,102 courts, benches and forums, so you can follow it by party or firm name. Claw does not use your case documents to train its AI models.

Create a FREE Claw account to find partnership rulings on point and track any firm dispute, using case search across Indian courts.

07Sources and further reading

• India Code (Indian Partnership Act, 1932, including Section 69): indiacode.nic.in
• Ministry of Corporate Affairs (for LLPs and companies, a different route): mca.gov.in
• Claw: clawlaw.in

This is a general format and information, not legal advice. Stamp paper value, the Registrar of Firms procedure, and any state amendment differ by state, so confirm the current rules and have the deed settled by an advocate before you sign.

08Frequently asked questions