Partnership Agreement Between An Individual And A Limited Company - Legal Draft

This Deed of

Partnership Is made at... on this ... day of... between Mr. 'A' residing at ...

hereinafter referred to as the 'Party of the First Part' and 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 Second

Part'.Whereas the Party of

the First Part owns a large piece of fallow land situated at - and more

particularly described In the Schedule hereunder written.And Whereas the said

land Is very suitable for carrying on minerals quarrying operations but the

Party of the First Part Is unable to carry on the said operations on his own.And Whereas the Party

of the Second Part has offered to co-operate with the Party of the First Part

in promoting the business of quarrying in the said land.And Whereas the Party

of the Second Part has the main object to carry out quarrying operations for

acquiring varieties of minerals.And Whereas it is

found more convenient to carry on the said business in partnership between the

Parties hereto and, therefore, the Parties have agreed to enter into

partnership on the following terms and conditions.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 'at will'.3.

The

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

consist of carrying on quarry operations on the said land by quarrying minerals

and selling the same and otherwise dealing with the same.4.

The

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

other places as they may be agree upon.5.

The

land described in the Schedule hereunder written is valued at Rs... and the

said land will be treated as a partnership asset and a contribution of the

Party of the First Part to the capital of the Firm. The Party of the Second

Part has agreed to bring in an equal amount of Rs... as its contribution to the

capital of the Firm. The Party of the First Part will not he bound to

contribute any further amount as capital, Whatever additional moneys are

required for the business of the Firm the same will be either advanced by the

Party of the Second Part as a loan or will be borrowed from any financial

Institution or from any other person. The loan advanced by the Party of the

Second Part will carry interest at the rate as may be agreed upon and which

will not be more than allowed as deduction under the Income Tax Act. If any

capital gains tax is required to be paid, by the Party of the First Part for

bringing the said land into the assets of the Firm. the same will be paid out

of the moneys of the Firm and debited to the capital account of the Party of

the First Part.6.

The

Party of the Second Part will be represented by the Managing Director thereof

or any other person authorised by him and he will act for and on behalf of the

Party of the Second Part in relation to the business of the firm and his acts

will be binding on the Party of the Second Part. The Managing Director or other

representative nominated by the Second Part will be working or managing partner

of the firm and he will be entitled to a remuneration at the maximum rate

allowable as deduction under the Income Tax Act. The Party of the First Part

will not be entitled to any remuneration.7.

The

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

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

year less the expenses of the management of the business 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

such other expenses as will be allowed as deduction under the Income Tax Act.8.

The

accounting year of the Firm will be from 1st April to 31st March of each

Christian Calendar year.9.

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 he prepared and signed by the Partners. If necessary or

required by law the Accounts will be got audited by a Chartered Accountant.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, 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 to the greatest - common advantage of the

Firm, the Party of the Second Part participating and attending through Its

Managing Director.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. not carry on any

business similar to the business of the Firm or any other business anywhere in

the district In which the said land Is situate without the consent of the other

partner.f. attend to the

business of the Firm diligently and actively,g. Not withdraw any

amount for his own profit benefit or use as remuneration or otherwise without

the consent of the other,h. be entitled to be

indemnified by the Firm in respect of payments 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 said land

described In the Schedule hereunder written, the goodwill, stock- in trade,

benefit of business licenses and permits, benefits of contracts entered etc.

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 profit 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-a. submit any dispute

with any other person to arbitration or com- promise or relinquish the 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 businesses of the Firm.e. enter into

partnership or other business unilaterally with any other person,f. assign or transfer

his or Its share or any Interest in the Firm,g. admit any person as a

partner of the firm,h. borrow any moneys for

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

the firm.i.

enter

into any contracts except contracts in the regular course of business of the

Firm,ii.

(j)

stand as a guarantor or surety for any person in the name of the Firm or for

and on behalf of the Firm.16.

If

the Partnership is dissolved, an account of the assets and debts and

liabilities will be made and after sale of the assets, except the said land,

the debts and liabilities will be paid out of the sale proceeds and the balance

if any will be divided between the parties in equal shares. The said land as

far as possible will be returned to the Party of the First Part. But If the

other assets of the Firm, are not sufficient to pay all debts and liabilities

then the Party of the First Part will have the option either to take over the

said land subject to such liabilities including the amount. If any payable to

the Party of the Second Party towards Its share In the assets of the Firm or to

allow the said land to be sold for payment of such debts and liabilities and

the balance of sale proceeds will be distributed between the parties in equal

shares.17.

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, 1996.18.

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 under the

Indian Income Tax Act, 1961.19.

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 Second Part.IN WITNESS WHEREOF

the parties have put their respective hands the day and year first hereinabove

written.Signed and delivered

by the withinnamed Mr. A in the presence of ...Signed for and on behalf

of the Party of the SecondPart M/s. A B &

Co. Pvt. Ltd., by Its Managing Director, in the presence of ... ...