Partnership Agreement Template and How to Draft One (2026)

What a partnership agreement does A partnership agreement (in India often called a partnership deed) sets out how two or more people will run a business together: what each puts in, how profits and losses are shared, who decides what, and what happens when a partner joins, leaves, or the business ends. Without one, the law supplies default rules that may not match what the partners actually intended, which is how good relationships turn into disputes. A word on structure before you use any template. A traditional partnership and a limited liability partnership (LLP) are not the same. In a traditional partnership the partners are personally liable for the firm's debts. An LLP is a separate legal entity that limits that liability and is created by registering with the authorities (in India, with the Ministry of Corporate Affairs under the LLP framework), and it is governed by its own LLP agreement rather than an ordinary deed. Decide which you are forming first, because the document and the filings differ. This template is for a traditional partnership; an LLP needs an LLP agreement and registration. This is general information, not legal advice. Partnership law, registration, and stamp duty vary by jurisdiction and, within India, by state, so have a qualified professional confirm the position and the stamping before you rely on this. ## The template ```

PARTNERSHIP DEED This Deed is made on [date] between: (1) [Partner 1 name], of [address]; (2) [Partner 2 name], of [address]; [add further partners as needed] (each a "Partner" and together the "Partners"). 1. NAME AND BUSINESS The Partners carry on business under the name "[Firm name]" (the "Firm") in the business of [describe], from [principal place of business]. 2. COMMENCEMENT AND DURATION The partnership begins on [date] and continues [until dissolved / for a fixed term of __ ] (a partnership at will unless stated otherwise). 3. CAPITAL CONTRIBUTIONS Each Partner contributes capital as follows: [Partner 1: amount; Partner 2: amount]. Interest on capital, if any, is [rate / none]. 4. PROFIT AND LOSS SHARING Profits and losses are shared: [Partner 1: __%; Partner 2: __%]. [State whether any partner draws a salary or fixed remuneration.] 5. DRAWINGS Each Partner may draw up to [amount/limit] per [month], adjusted at year end against their profit share. 6. ROLES AND DUTIES [Set out each Partner's role, responsibilities, and time commitment, and any matters reserved to unanimous or majority decision.] 7. DECISION MAKING Day-to-day decisions are taken by [majority / the managing partner]. The following require unanimous consent: admitting a partner, borrowing above [amount], selling firm assets, or changing this Deed. 8. BANKING AND ACCOUNTS The Firm maintains a bank account operated by [names]. Proper books of account are kept and accounts drawn up at each year end. 9. ADMISSION, RETIREMENT, AND EXPULSION A new partner is admitted only with unanimous consent. A Partner may retire on [notice period] written notice. [Set out grounds and process for expulsion, if any.] 10. DEATH OR INCAPACITY On a Partner's death or incapacity, the partnership [continues among the remaining Partners / is dissolved], and the outgoing Partner's share is valued and paid as set out in clause 12. 11. NON-COMPETE AMONG PARTNERS While a Partner and for [period] after leaving, a Partner shall not [carry on a competing business / solicit the Firm's clients], to the extent permitted by law. 12. VALUATION AND SETTLEMENT OF SHARE On a Partner leaving, their share is valued by [method, e.g. the last audited accounts plus goodwill assessed by an independent valuer] and paid within [period]. 13. DISPUTE RESOLUTION Disputes are referred to [mediation then arbitration / the courts of place], under [applicable rules]. 14. DISSOLUTION The Firm may be dissolved by [unanimous consent / as provided by law]. On dissolution, assets are applied to debts, then to repay capital, then shared in the profit-sharing ratio. 15. GOVERNING LAW This Deed is governed by the laws of [jurisdiction]. Signed by the Partners: ____________ ____________ ____________ Name / date Name / date Name / date

2. **Capital and profit share (clauses 3 to 4).** State each contribution and each share precisely. The profit-sharing ratio need not match the capital ratio, but it must be stated, or the default equal split may apply.
3. **Decision making (clause 7).** List which decisions need unanimous consent. This single clause prevents many later disputes by making the big calls clear in advance.
4. **Leaving and valuation (clauses 9 to 12).** Agree how a partner leaves and how their share is valued and paid while everyone is still on good terms. Valuation disputes are among the most common and most bitter, so pick a clear method now.
5. **Non-compete among partners (clause 11).** A restraint among partners, especially tied to leaving or to the sale of goodwill, sits on different ground from an employee non-compete and has more room under the law, but keep it reasonable. This varies by jurisdiction.
6. **Registration and stamping.** In India a partnership deed is usually stamped, and registering the firm gives important procedural benefits. An LLP must be registered to exist at all. Confirm the local stamping and registration steps.
7. **Dispute resolution (clause 13).** Choose a workable path. Mediation then arbitration can keep a dispute private and faster than court. ## What a solid partnership agreement settles | Element | Why it matters |
|---------|----------------|
| Capital and profit shares | Prevents the default equal split applying by accident |
| Reserved decisions | Makes the big calls clear in advance |
| Exit and valuation | Stops the most common and bitter disputes |
| Admission of partners | Keeps control over who joins |
| Dissolution waterfall | Orders who is paid first if the firm ends |
| Dispute resolution | Chooses a faster, private path | ## Where a contract workspace helps Drafting a deed that fits the partners, keeping it current as people join or leave, and tracking renewal, valuation, and notice dates is careful work that tends to get neglected once the business is running. That is the work an AI contract workspace can carry. Instead of editing an old deed by hand, you draft from a short brief, see each clause marked favourable, neutral, or unfavourable to your company, adjust a share or a reserved-decision list in plain English, and let the workspace keep the versions straight and track the key dates. [Adira](https://adiralaw.com) is one such workspace, keeping drafting, per-clause risk, version history, and date tracking together and tuned to how your company contracts. The template above works on its own; a workspace just makes the drafting and the upkeep less manual. Decide partnership or LLP first, state the shares and the exit terms clearly, and confirm the local registration and stamping before you rely on the deed.