Partnership Agreement Net Lawman Legal Documents India by netlawman05


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									                                  Net Lawman Legal Documents India

Can a Partnership be created through an oral agreement?
Even though the bare Indian Partnership Act, 1932 is silent as to the validity of a oral partnership
agreement, Section 5 of the Act states clearly that "partnership arises from contract".
Hence by virtue of Section 9 of the Indian Contracts Act, a verbal partnership agreement is
equally enforceable as a written agreement, if provable.

So what do you think! Can you put words in your partner’s Mouth after let say if he backs off
from Partnership after putting the business against his name and fleecing big chunk of your
profit. Do you really think you can prove it in court that your partner in the name of God is
saying the truth that yes we entered in to a partnership “Orally” but due to some reasons were not
able to ink it down, be it in an act of sheer confidence in between us or because I wanted to give
an impression that we had a long standing close relationship and out of utter shyness I could not
mull courage to challenge my colleague’s integrity.

 So hypothetically you are in middle of nowhere, your share plummeted in to the hands of your
long time most trusted friend, relative or nemeses I would like to say who could not stand your
existence in whatever setup you two were up to and here you are standing stranded with no way

 Enough of the dramatization lets come to the reality. It is always more prudent to get an
agreement in writing rather than orally as, the enforceability of the oral agreement is reliant on
its credibility which is not always easy to prove.

What exactly a partnership agreement is
If you are from the state of Jammu and Kashmir you do not need to read it as this document is
not applicable there. Commonly it is known as Indian Partnership Act, 1932andaccording to
exact wording of the law an agreement can be defined as

“Partnership" is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all. Persons who have entered into partnership with
one another are called individually "partners" and collectively "a firm", and the name under
which their business is carried on is called the "firm name"

Are you getting it? No!
 Let me explain again. Let’s just say Mr. Rahul wants to start a lucrative business of poultry
farming but he lacks capital, fortunately one fine morning he bumps into Mr. Sharma his next
door neighbor who is willing to invest money into something manageable. After customary
exchange of pleasantries Mr. Sharma straight away burps out his willingness to invest in some
what a cottage level business and here we are Mr. Rahul comes up with his Plan of Poultry farm.
He puts forward all the details. To cut story Short both enter an agreement of 60-40 Profit share
mechanism and to validate it legally they ink down an agreement on Partnership Agreement
Document which includes following specifications

Partnership Agreement                                            
                                   Net Lawman Legal Documents India

·     Duration and termination provisions.
·     Partnership shares and Partnership property.
·     Capital, emoluments of partners.
·     Accounting, profits and losses.
·     Restrictions on partners, retirement of a partner.
·     Termination of partnership; banking arrangements.
·     Non-compete and non-disclosure by partners.
·     Participation, role and responsibility for statutory compliance.
·     Beneficiaries of agreement.
·     Registration.
·     Dispute resolution.

How many People can enter partnership?
Logically 2 and legally 20 people can enter partnership. Feel sorry for the 21st guy who wants to
come in for the venture but don’t worry now you guys are eligible to open up a company as per
Companies act.

But that doesn’t mean
That if you owe someone money or
 You are lending or
 You are in agreement let’s just in case of renting a property or anything exchangeable
Or in the case of annuity (allowance, pension, gratuity)
You enter in the act of partnership because in all these cases you are not entering into any act of
partnership and are fulfilling the due payment or an act of exchange according to the situation as
per agreement.

So if there are any liabilities on the business who is supposed to pay them off, if the
business or the partnership ends?
Well in case sorry, as after signing the agreement now it means if you share your profits same
goes with the liabilities. And resultantly you have to pay it but that too according to set of rules
that both parties have agreed on.

I know Mr. Rahul you are feeling Shaky about you poultry business venture with Mr.
Sharmaand you are thinking about where’s the exit because you are putting in all the efforts and
Mr. Sharma is getting away doing nothing. SO! No problem Sharma g you should put in
Partnership at Will clause in the “Partnership agreement Document” according to which you
can simply send a revocation of partnership notice to Sharma g.

Partnership Agreement                                             
                                  Net Lawman Legal Documents India

And if Mr. Sharma god forbids dies after signing the agreement will it carry on or not
Unfortunately partnership agreement will die with Sharma g until and unless Mrs. Sharma or any
other relative willingly reconstitute it on same prerequisites or the formulate agreement from
scratch using “Partnership agreement Document”

Do I need to register the firm formulated out of Partnership Agreement?
Registration of firm is not compulsory, though usually done as registration brings many
advantages to the firm. Since ‘partnership contract ’ is a ‘Concurrent Subject’ as per Constitution
of India, registration of firms and related work is handled by State Government in each State.
Section 71 authorizes State Government to make rules for prescribing fees for filing documents
with registrar prescribing forms of various statements and intimations are to be made to registrar
and * regulating procedures in the office of Registrar.

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Net Lawman Ltd, established in 2000, is an English company and is the premier supplier of
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Partnership Agreement                                           

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