Deed of Retirement from Partnership - Template Form Pro · IN-law

DEED OF RETIREMENT OF PARTNER

This Deed of Retirement ("Deed") is made and executed at ________ in the State / Union Territory of ________ on this ________.

BY AND BETWEEN

1. ________, aged ________ years, son/daughter/wife of ________, holding Permanent Account Number (PAN) ________ and Aadhaar No. ________, residing at ________ (hereinafter referred to as the "Retiring Partner", which expression shall, unless repugnant to the context or meaning thereof, mean and include his/her heirs, legal representatives, executors, administrators, successors and permitted assigns) of the ONE PART;

AND

2. ________, the particulars (names, ages, parentage, PAN and residential addresses) of whom are more fully set out in Schedule I hereto (hereinafter collectively referred to as the "Continuing Partners", which expression shall, unless repugnant to the context or meaning thereof, mean and include their respective heirs, legal representatives, executors, administrators, successors and permitted assigns) of the OTHER PART.

The Retiring Partner and the Continuing Partners are hereinafter individually referred to as a "Party" and collectively as the "Parties".

WHEREAS the Parties hereto have been carrying on business in partnership under and in accordance with the Deed of Partnership dated ________ (the "Partnership Deed"), under the name and style of ________, having its principal place of business at ________ (the "Firm"), constituted under the provisions of the Indian Partnership Act, 1932.

AND WHEREAS the Firm is/is not registered with the Registrar of Firms under Section 58 of the Indian Partnership Act, 1932, bearing Registration No. ________.

AND WHEREAS the Firm was formed for the purpose of carrying on the business of: ________.

AND WHEREAS immediately prior to the date of retirement hereinafter mentioned, the Retiring Partner held a share of ________ in the profits and losses of the Firm.

AND WHEREAS the Retiring Partner has expressed his/her desire to retire from the Firm and has given notice to the Continuing Partners of his/her intention to retire from the said partnership with effect from ________ (the "Retiring Date"), and the Continuing Partners have agreed to such retirement on the terms and conditions hereinafter appearing.

AND WHEREAS the accounts of the Firm have been taken and settled as on the Retiring Date, the assets having been valued and the debts and liabilities ascertained, and upon such settlement a sum of Rs. ________/- (Rupees ________ only) has been found to be due and payable to the Retiring Partner in full and final settlement of his/her share, right, title and interest in the Firm.

AND WHEREAS save as expressly modified herein, the terms of the Partnership Deed shall continue to govern the relationship of the Parties to the extent applicable, and in the event of any inconsistency between the Partnership Deed and this Deed, the terms of this Deed shall prevail.

AND WHEREAS the Parties are now desirous of recording the terms and conditions of such retirement in the manner hereinafter appearing.

NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED, DECLARED AND CONFIRMED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

1. RETIREMENT AND CONTINUATION

(a). The Retiring Partner does hereby retire and shall be deemed to have retired from the Firm carried on under the name and style of ________ with effect from the Retiring Date, namely ________.

(b). With effect from the Retiring Date, the Continuing Partners shall be entitled to continue to carry on the said business in partnership upon such terms as may be agreed amongst themselves, and the Retiring Partner shall have no concern or interest therein.

(c). The Parties shall jointly intimate the Registrar of Firms of the retirement of the Retiring Partner by filing the requisite notice under Section 63 of the Indian Partnership Act, 1932, and shall carry out all consequential changes with the Income Tax Department, banks, statutory authorities and other concerned persons.

2. DEFINITIONS

(a). "Act" means the Indian Partnership Act, 1932, as amended from time to time.

(b). "Business Day" means any day, other than a Saturday, Sunday or public holiday, on which banks are open for ordinary banking business in ________.

(c). "Deed" means this Deed of Retirement together with all schedules and annexures hereto.

(d). "Firm" means the partnership firm referred to in the recitals above.

(e). "Parties" means the Retiring Partner and the Continuing Partners, collectively or individually as the context requires.

(f). "Partnership Deed" means the Deed of Partnership referred to in the recitals above, as amended from time to time.

(g). "Retiring Date" has the meaning ascribed to it in the recitals above.

3. INTERPRETATION

(a). Headings are included for convenience only and shall not affect the interpretation of this Deed.

(b). Unless the context indicates otherwise, words importing the singular include the plural and vice versa, words importing a natural person include a body corporate and vice versa, and words importing any gender include all genders.

(c). Where any number of days is prescribed, the same shall be reckoned exclusively of the first and inclusively of the last day, unless the last day falls on a day which is not a Business Day, in which case the last day shall be the next succeeding Business Day.

(d). Any reference to a statute, regulation or other legislation shall be a reference to such statute, regulation or legislation as amended, modified, re-enacted or substituted from time to time.

(e). The use of the word "including" followed by specific examples shall not be construed as limiting the meaning of the general words preceding it.

(f). The terms of this Deed having been mutually negotiated, the rule of construction known as the doctrine of contra proferentem shall not apply.

(g). Words and expressions used but not defined herein shall have the meanings respectively assigned to them under the Act and any other applicable law, as the context may require.

4. RELEASE OF SHARE AND DEVOLUTION OF INTEREST

(a). The Retiring Partner doth hereby release, relinquish, surrender and assign unto the Continuing Partners all his/her share, right, title and interest in and to the business of the Firm, its assets (including goodwill, tenancy/leasehold rights, plant, machinery, stock-in-trade, book debts, licenses and permits), outstanding dues and receivables and all contractual obligations, all of which shall henceforth belong to and vest in the Continuing Partners absolutely.

(b). The Continuing Partners hereby agree to discharge all the debts and liabilities of the Firm, whether present or contingent, and to indemnify and keep indemnified the Retiring Partner against all such debts and liabilities and against all losses, costs, charges, claims, demands and expenses that the Retiring Partner may incur or suffer on account thereof.

(c). The Continuing Partners shall, within fifteen (15) days of the Retiring Date, cause a public notice of the retirement of the Retiring Partner to be published in the Official Gazette and in at least one widely circulated newspaper, in accordance with Section 32 of the Act, and shall indemnify the Retiring Partner against any liability arising from any delay or failure in publishing such notice.

(d). The Retiring Partner confirms that upon the settlement of accounts the sum of Rs. ________/- (Rupees ________ only) is due and payable to him/her in full and final settlement of his/her share, right, title and interest in the Firm, including its assets and goodwill, and that he/she shall have no further claim whatsoever against the Continuing Partners or the Firm in respect thereof.

(e). The Continuing Partners covenant to pay the said sum to the Retiring Partner in the following manner:

________

(f). The Retiring Partner covenants that he/she shall not use the name of the Firm and shall not represent himself/herself to be a partner of the Firm in any manner whatsoever after the Retiring Date.

(g). The Retiring Partner hereby appoints the Continuing Partners jointly and severally as his/her constituted attorneys, with authority to institute legal proceedings and to do all such acts and things as may be necessary to recover the debts and dues of the Firm in respect of transactions concluded up to the Retiring Date.

(h). The Retiring Partner agrees and undertakes to execute all such documents, deeds, writings and papers and to do all such acts and things as may reasonably be required to give complete and effective effect to his/her retirement from the Firm.

(i). The Retiring Partner shall be solely liable for and shall pay all income tax and other taxes payable on his/her income and on all amounts received by him/her from the Firm.

5. COVENANT NOT TO COMPETE

(a). The Retiring Partner covenants and agrees that, for a period of ________ from the Retiring Date, he/she shall not, without the prior written consent of the Firm, directly or indirectly, whether on his/her own behalf or on behalf of or in association with any other person, firm, body corporate or entity (whether as proprietor, partner, shareholder, agent, consultant, employee or otherwise), carry on, engage in or have any interest in any business which is in direct competition with the existing business of the Firm. Such restraint shall operate only to the extent reasonable and permissible under Section 36 of the Act and Section 27 of the Indian Contract Act, 1872, being a restraint operating between a retiring partner and the continuing partners.

(b). The restricted geographical area for the purposes of this clause shall be:

________

(c). The Parties agree that the restrictions in this clause are reasonable and necessary for the protection of the goodwill of the Firm. Should any such restriction be held unreasonable or unenforceable, it shall be read down to the minimum extent necessary to render it valid and enforceable.

6. COVENANT NOT TO SOLICIT

(a). For a period of ________ from the Retiring Date, the Retiring Partner shall not, whether for his/her own benefit or for the benefit of any other person or entity, (i) solicit, canvass or accept the business of any person who is, or who was during the preceding twelve (12) months, a customer or supplier of the Firm; (ii) interfere with the business relationship between the Firm and any of its customers, suppliers or business associates; or (iii) solicit, induce or attempt to induce any employee or person rendering services to the Firm to terminate his/her engagement with the Firm.

7. CONFIDENTIAL INFORMATION

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(b). To the extent any Confidential Information constitutes "personal data" within the meaning of the Digital Personal Data Protection Act, 2023, the Retiring Partner shall cease to process the same and shall comply with the obligations applicable to him/her thereunder.

(c). The obligations under this clause are in addition to any obligations of the Retiring Partner under applicable law and shall survive the execution and completion of this Deed.

8. HEADINGS

The headings in this Deed are for convenience of reference only and shall not define, limit or affect the construction or interpretation of any provision hereof.

9. WAIVER

No waiver of any term or condition of this Deed shall be valid or binding unless made in writing and signed by the Party against whom such waiver is sought to be enforced. The failure of either Party to enforce at any time any provision of this Deed shall not be construed to be a waiver of such provision or affect the right of such Party to enforce the same thereafter.

10. ASSIGNMENT

Neither Party shall assign, transfer or delegate any of its rights or obligations under this Deed, in whole or in part, without the prior written consent of the other Party. Subject to the foregoing, this Deed shall be binding upon and enure to the benefit of the Parties and their respective heirs, legal representatives, successors and permitted assigns.

11. SEVERABILITY

In the event that any provision of this Deed is held to be invalid, illegal or unenforceable by any court or authority of competent jurisdiction, such provision shall be deemed modified to the minimum extent necessary to render it valid and enforceable, and the remaining provisions of this Deed shall continue in full force and effect. The Parties agree to execute all such documents as may be necessary to give effect to this clause.

12. NOTICES

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Address of the Retiring Partner: ________; Email: ________.

Address of the Continuing Partners: ________; Email: ________.

13. DISPUTE RESOLUTION

(a). Any dispute, difference or claim arising out of or in connection with this Deed, including its existence, validity, interpretation, performance, breach or termination, shall in the first instance be sought to be resolved amicably by mutual discussion between the Parties.

(b). Failing such amicable resolution within thirty (30) days, the dispute shall be referred to and finally resolved by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996, and any statutory modification or re-enactment thereof for the time being in force. The arbitration shall be conducted by a sole arbitrator mutually appointed by the Parties. The seat and venue of arbitration shall be at ________ and the proceedings shall be conducted in the English language. Each Party shall bear its own costs, and the fees of the arbitrator shall be borne equally, subject to the award of the arbitrator.

(c). This Deed shall be governed by and construed in accordance with the laws of India, and subject to the arbitration agreement above, the courts at ________ shall have exclusive jurisdiction.

14. LEGAL FEES AND COSTS

In the event of any legal action by either Party to enforce any provision of this Deed, the prevailing Party shall be entitled to recover from the other Party all reasonable costs of enforcement, including reasonable legal fees and costs, whether incurred before, during or after any litigation or arbitration, including any appeal.

15. SURVIVAL

Notwithstanding anything contained herein, any provision of this Deed which by its nature is intended to survive the completion or termination hereof, including the provisions relating to release of share, indemnity, non-compete, non-solicitation, confidentiality and dispute resolution, shall remain in full force and effect.

16. STAMP DUTY AND REGISTRATION

This Deed shall be duly stamped in accordance with the stamp duty payable under the applicable Stamp Act in the State / Union Territory of ________, and the cost of such stamp duty and of registration, if applicable, shall be borne by ________.

17. COUNTERPARTS

This Deed may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

18. ENTIRE AGREEMENT

The Parties confirm that they have read and understood the terms of this Deed and have executed the same of their own free will, without any coercion, undue influence, fraud or misrepresentation. This Deed constitutes the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements between them in respect thereof.

IN WITNESS WHEREOF the Parties hereto have set and subscribed their respective hands to this Deed of Retirement on the day, month and year first hereinabove written.

Dated: ________

SIGNED AND DELIVERED by the within named Retiring Partner:

Signature: ______________________

________

SIGNED AND DELIVERED by the within named Continuing Partners:

Signature: ______________________

________

WITNESS-1

Name: ________

Address: ________

Signature: ______________________

WITNESS-2

Name: ________

Address: ________

Signature: ______________________

SCHEDULE I — PARTICULARS OF THE CONTINUING PARTNERS

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