Partnership Agreement Between Two Limited Companies Legal Draft Template

This Deed of

Partnership is made at... on this.. day of.. between M/s. A B & Co. Pvt.

Ltd., a Company registered under the Companies Act, 1956. and having its

registered office at ... hereinafter referred to as the, Party of the First

Part. and M/s. X Y Z & Co. a Company registered under the said Act and

having its registered office at ... hereinafter referred to as the 'Party of

the Second Part'.Whereas both the

parties of the First Part and of the Second Part are, under their respective

Memorandum of Association, entitled to carry on the business of producing

electricity and supplying the same to any area.And Whereas both the

Parties of the First Part and Second Part are entitled to enter Into

partnership with any person or persons including a company for carrying on the

business authorised by their respective Memorandum of Association.And Whereas the

parties hereto have proposed to set up in joint collaboration a plant to

produce electricity and supply the same to the town of ... and to enable them

to pool together their finances and technical expertise they have therefore

proposed to enter into a partnership.And Whereas the

parties have obtained license or permission of the Govt. for producing and

supplying electricity to the said town.And Whereas it is,

therefore, proposed to enter into this deed of partnership containing the terms

and conditions agreed upon between the parties.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... and the period of the

partnership shall be for a period of ten years from the date hereof. The said

period may be extended as the parties may by mutual consent decide.3.

The

business of the partnership (hereinafter referred to as the 'Firm') consist of

setting up a plant for manufacture or production of electricity on grid system

and to supply-the same to the town of .4.

The

office of the partnership shall be at .... The parties will open branches

at such other places as may be agreed upon.5.

The

parties 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 partner shall contribute more amount than Its share In the capital It will

be treated as a loan by it to the Firm carrying Interest at the maximum rate

allowable as deduction under the Income Tax Act.6.

The

net profits and losses of the Firm will be shared by the partners hereto in

equal shares or proportion. Net profit will mean gross profit earned in each

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 of the firm and all other expenses as may be

allowable as deduction under the Income Tax Act.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 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 partners. The accounts will

be got audited by a Chartered Accountant every year.9.

The

Managing Director or any other authorised representative of each of the parties

hereto will represent his company on the Firm and for all practical purposes he

will be considered as the partner of this partner- ship.10.

The

books of accounts 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.11.

All

the working staff such as clerks, peons, accountants, cashier, technicians,

salesmen and others will be appointed by the joint consent of the parties

hereto and their wages and salaries and other emoluments will be fixed by

mutual consent of the parties hereto.12.

Each

of the Parties hereto shall -a. participate and

attend to the business of the Firm through their respective Managing Director

or authorised representative for the time being 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 wilful negligence or fraud in the conduct of the

business.e. attend to the

business of the Firm diligently and actively.f. not withdraw any

amount for its 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

himi.

in

the usual and proper course of business of the Firm. andii.

in

doing any act for protecting the Firm from loss in emergency.13.

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. In relation to the said business will belong to the Parties In

equal shares and the property of the Firm shall be used by the parties

exclusively for the business of the firm.14.

Every

party shall account for the profits earned from any transaction of the Firm or

for the use of the property in business transaction of the Firm.15.

Any

party hereto shall not, without the consent of the other and in respect of or

relating to the said partnership business,a. submit any dispute

with any other person to arbitration or com- promise or relinquish any 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. assign or transfer

Its share or any Interest in the Firm, (f) admit any person as a partner In the

Firm,f. borrow any moneys for

or in the name of the Firm, or create any security or charge on the assets of

the Firm,16.

The

Parties shall open one or more accounts either current, saving or overdraft or

cash credit with one or more banks as may be agreed upon by the Parties and the

account or accounts will be operated by the Managing Director or other

authorised representative of each of the Parties hereto.17.

No

party hereto shall be entitled to dissolve the partnership before the

expiration of the said period aforementioned.18.

If

any party does not desire to continue the partnership or if any party goes Into

winding up voluntarily or through Court, the other party hereto will be

entitled to take over the entire business together with all assets and subject

to all liabilities at a valuation to be made through the Chartered Accountants

of the Firm and the share of the former Party will be paid by instalments as

may be agreed upon or decided by Arbitration.19.

On

the expiration of the said period of ten years or the extended period if any,

the business of the partnership together with its assets and liabilities will

be transferred to another company to be formed and registered jointly by the

parties hereto on such terms as may be agreed upon failing which the

partnership will be dissolved and the dissolution will be effected In terms of

the provisions of the Partnership Act, 1932.20.

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.

however 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 arbitration and the arbitration shall

be governed by the Arbitration & Conciliation Act, 1996.21.

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. 1961.22.

Nothing

In this Deed shall be constrained to prevent or disable any party hereto to

carry on any business in terms of Its Memorandum of Association anywhere except

the business of the partnership and no partner shall be entitled to have any

right or concern with the other business and internal management of the other.23.

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

for and on behalf of the withinnamed M/s. A B & Co. Ltd., by its Managing

Director, Mr ...... duly authorised In that behalf by the Board of Directors.

In the presence of ...Signed and delivered

by the withinnamed M/s. X Y Z Co. Ltd., by Its ManagingDirector Mr .... duly

authorised by the Board of Directors, Mr ........ In the presence of ...