PARTNERSHIP
AGREEMENT BETWEEN TWO LIMITED COMPANIES
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 him (A) in the
usual and proper course of business of the Firm. and (ii) 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 Managing
Director
Mr .... duly authorised by the Board of Directors, Mr ........ In the presence
of ...
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