INTRODUCTION

A partnership is basically formed when two or more individuals come together with an intention of earning profit from a common business activity. The works and terms of partnership firm are governed by the Partnership Deed, which is executed at the time of formation itself.

A partnership deed is an agreement between a firm’s partners, which states the terms and conditions, such as the profit-sharing method, a new partner’s admission, salary, and other details. It is a legal document that outlines the terms & conditions of a partnership, it defines the roles, responsibility and obligations of all the partners in a partnership.

Many times, some changes are required in the deed to bring new partners or to change the terms of the deed or for any other changes that may be needed in the course of business and those changes can only be done by amending the partnership deed.

FOLLOWING ARE THE COMMON REASONS OF CHANGING THE PARTNERSHIP DEED

  • Change of name of the firm.
  • Change of Business activity of the firm.
  • Change in Management Structure.
  • Shifting of Registered Office of the firm.
  • Changes in Profit or Loss sharing ratio of partners.
  • Changes in the Total Contribution of the firm.
  • Appointment or Resignation of Partner.
  • Modification of Rights and Responsibilities.
  • Change of duration of the firm.

IMPORTANCE OF PARTNERSHIP DEED

  • If any Dispute arises among partners, it will be settled as per the T&C mentioned in the deed.
  • The Deed helps partners to define the terms of their partnership.
  • Deed smooth functioning of the firm as the terms and liabilities between partners are in a written form.
  • It contains the remuneration that is to be paid to partners, thereby avoiding any dispute or confusion.

CONTENTS OF PARTNERSHIP DEED

  • Name of the firm.
  • Details of Partners.
  • Place of the business.
  • Business of the firm.
  • Capital contribution.
  • Sharing % of profit/loss.
  • Duties and obligations of partners.
  • Duration of firm.
  • Admission, death and retirement of partners.

PROCEDURE OF CHANGING THE PARTNERSHIP DEED

The deed needs to be modified for giving effect to any amendment in the deed and the amendment is done by making an agreement called “SUPPLEMENTARY DEED” to the original deed.

The amendment is done in below steps in case of Unregistered Partnership Firm:

  • Take the consent of all the partners.
  • Prepare and execute the Supplementary Deed, get it signed and duly stamped and notarized.

The amendment is done in below steps in case of Registered Partnership Firm:

  • Take the consent of all the partners.
  • Prepare and execute the Supplementary Deed, get it signed and duly stamped and notarized.
  • Fill the form in Capital Letters in the respective Form No. notified by the Registrar of Firms.
  • Payment of Challan fees with the respective Bank.
  • Submission of the application with the Registrar of Firms of concerned state with below documents:
    • Photocopy of the original partnership deed duly notarized from the state where registered office of the Firm is located.
    • Photocopy of the New Partnership Deed i.e. Supplementary Deed duly notarized from the state where registered office of the Firm is located.
    • Self-Attested ID-Proofs of all the partners.
    • Copy of challan receipt deposited in the Bank.
    • If deed is changed due to change of place of business, then attach ownership proof of new place of business in the application.
    • Photocopy of both the Certificate A and Certificate C which was issued at time of constitution of the firm duly attested by partners.


    Formalities that are Required to be Completed

    • Payment of stamp duty
    • Signature along with notary
    • Filing the supplementary Deed with the Registrar of Firms (Only if it is a registered firm).
    • An application of modification is filed with the form to the Registrar of Firms along with the following documents:
      • The original Partnership deed and the earlier executed supplementary agreement, if present.
      • The supplementary Deed, which is executed by the partners
      • If there is a change in the business place, address proof of the new premises, along with rent agreement and the owner’s NOC is required
      • If there is a change of partners, then the identity and address proof of the partners is needed.


    Frequently Asked Questions

    What is a partnership deed?

    It is a legal document that outlines the terms & conditions of a partnership, it defines the roles, responsibility and obligations of all the partners in a partnership.

    What are the documents required for changing the partnership deed?

    Original Partnership deed and Supplementary Deed.

    Reason for changing the partnership deed?

    • Change of name of the firm.
    • Change of Business activity of the firm.
    • Change in Management Structure.
    • Shifting of Registered Office of the firm.
    • Changes in Profit or Loss sharing ratio of partners.
    • Changes in the Total Contribution of the firm.
    • Appointment or Resignation of Partner.
    • Modification of Rights and Responsibilities.
    • Change of duration of the firm.

    Is it necessary to pay stamp duty on Supplementary Deed and get it notarized?

    Yes, it is mandatory to pay stamp duty on Supplementary Deed and get it duly signed by all partners and notarized to make the deed legally binding.

    How many times the Partnership Deed can be amended?

    There is no limit on the times of amendment in the Partnership Deed.

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