Quick answer
What is a partnership deed and how much stamp duty applies in Delhi?
A partnership deed is the signed agreement between partners that fixes capital, profit share, powers and exit terms for the firm. In Delhi, stamp duty on a partnership deed is 1% of the capital contributed, capped at ₹5,000, and it is paid through e-stamp paper before all partners sign.
- Stamp duty in Delhi: 1% of capital, ceiling ₹5,000
- Every partner signs; witnesses and notarisation are usual
- Needed for the firm's PAN, bank account and GST
- Changes need a supplementary or retirement deed
What is a partnership deed and who needs one?
A partnership deed is the contract that turns an informal arrangement between two or more people into a working firm with written rules. The Indian Partnership Act, 1932 allows a partnership to exist on an oral understanding, but nothing practical happens without a written deed: no PAN for the firm, no current account, no GST registration and no registration with the Registrar of Firms.
You need one if you are:
- Starting a trading, manufacturing or service business with a relative, friend or investor and want it in a firm's name.
- Formalising a family business that has run for years on trust and now needs a bank loan or GST.
- Adding a new partner, letting one retire, or changing the profit ratio in an existing firm.
- Converting a sole proprietorship into a firm because a second person is joining.
If the partners want protection for personal assets, a deed is the wrong tool. Read LLP vs partnership firm first, because an LLP agreement follows a different law and filing route.
Partnership deed format: which clauses must it contain?
A workable partnership deed format covers identity, money, control and exit. Section 58 of the Partnership Act lists what the Registrar needs: firm name, principal place of business, other places of business, the date each partner joined, partners' full names and permanent addresses, and the duration of the firm. A deed that leaves any of these out cannot be used cleanly for registration.
Beyond those legal basics, the clauses below are where Delhi partnerships most often fall out. Settle each one in writing before anyone signs.
| Clause | What to write | Why it matters |
|---|---|---|
| Firm name and address | Exact name, principal place of business, any godown or branch | Must match the GST, bank and Registrar records |
| Partners | Full names, permanent addresses, date each joined | Required in the section 58 statement |
| Nature of business | Activities the firm may carry on | Limits what one partner can commit the firm to |
| Duration | At will, fixed term, or until a project ends | Decides how the firm can be ended |
| Capital | Amount or assets each partner brings and when | Sets the stamp duty base in Delhi |
| Profit and loss ratio | Percentages for each partner | Without it, the Act's default rules apply |
| Partner salary and interest | Who is paid, how it is worked out, when | Income tax allows the firm a deduction only where the deed authorises it |
| Bank and signing powers | Who operates accounts, payment limits, joint signatures | Stops one partner draining the account |
| Admission, retirement, death | Notice period, valuation of share, payout timeline | The most common source of family disputes |
| Disputes | Arbitration seat in Delhi, or another method | Keeps fights out of years of litigation |
Section 58 contents from the Indian Partnership Act, 1932 (bare text read on LatestLaws, 12 November 2026).
Need help with partnership deed drafting? Talk to a chartered accountant in Delhi today. First call is free.
What is the stamp duty on a partnership deed in Delhi?
Stamp duty on a partnership deed in Delhi is 1% of the capital, with a ceiling of ₹5,000. Where the total capital is ₹500 or less, the ceiling drops to ₹200. These rates sit in Article 46 of the Delhi schedule to the Indian Stamp Act, 1899. Dissolving a partnership by deed carries a separate flat duty of ₹200.
Some websites describe ₹200 as a minimum for every deed. The schedule text we read uses ₹200 as a ceiling for very small capital, not a floor, so check the amount on the e-stamp before buying more paper than you need.
| Total capital in the deed | 1% of capital | Duty payable |
|---|---|---|
| ₹500 | ₹5 | ₹5 (ceiling ₹200 not reached) |
| ₹50,000 | ₹500 | ₹500 |
| ₹2,00,000 | ₹2,000 | ₹2,000 |
| ₹5,00,000 | ₹5,000 | ₹5,000 |
| ₹25,00,000 | ₹25,000 | ₹5,000 (ceiling applies) |
| Dissolution deed | n/a | ₹200 flat |
Rates from the Indian Stamp Act, 1899 as applied to Delhi, Article 46, read on LegitQuest on 12 November 2026. Examples are our arithmetic. Confirm the figure when you generate the e-stamp.
How do you pay stamp duty and execute the deed?
Partnership deed drafting, stamping and signing usually takes a few working days once the partners agree terms. The Delhi Revenue Department says e-stamp paper up to ₹500 can be bought from any authorised vendor, and higher values are paid through banks (Revenue Department, Delhi). So a firm with ₹5 lakh capital buys its e-stamp through a bank, while a small firm can use a local vendor.
- 1
Agree the commercial terms
Partners settle capital, profit ratio, salaries, signing powers and exit terms. Put them in a one-page term sheet that everyone initials before drafting.
- 2
Draft and review
The draft deed goes to every partner. Each one reads it and asks for changes now, not after signing.
- 3
Buy the e-stamp
Generate e-stamp paper for the duty worked out on the final capital figure, in the name of one of the partners.
- 4
Print and sign
Print the deed on or with the e-stamp. All partners sign every page, with two witnesses.
- 5
Notarise
Most banks and many offices expect the deed to be notarised, so we treat this as a standard step.
- 6
Use the deed
Apply for the firm's PAN, open the current account, then move to GST and Registrar of Firms registration.
Is registering the partnership deed compulsory?
Registering a firm with the Registrar of Firms is optional under the Partnership Act, but skipping it carries real costs. Section 69 says a partner of an unregistered firm cannot sue the firm or other partners to enforce rights under the partnership contract, and the firm itself cannot sue a third party to enforce a contract. A customer who refuses to pay an unregistered firm is much harder to chase.
The same section still allows a suit to dissolve the firm or to claim accounts of a dissolved firm, so partners are not left with no remedy at all. In Delhi, the Registrar's work is handled at the district SDM headquarters office for the firm's address. The full filing route, documents and follow-up work are on our partnership firm registration in Delhi page.
Section 69 summary from the bare text of the Indian Partnership Act, 1932. This page is general information, not legal advice on a live dispute.
How do you change a partnership deed later?
A supplementary partnership deed records a change while the firm continues: a new partner joins, the profit ratio moves, capital is added, or the business address shifts. A retirement deed records a partner leaving, and a dissolution deed ends the firm. Each is a fresh instrument, so each needs its own e-stamp and signatures.
For a registered firm, section 63 lets an incoming, continuing or outgoing partner notify the Registrar so the register shows the change and its date. Do this promptly. An outgoing partner who does not give notice may still be treated as a partner by people dealing with the firm.
- Bank: update the account mandate with the new deed.
- GST: file an amendment on the GST portal when partners change; see GST registration in Delhi for the registration side.
- Income tax: give whoever prepares the firm's return the date of the new deed, so profit is split on the right ratio for each part of the year.
What mistakes in a partnership deed cause disputes?
The costliest mistakes are silence on exit terms and vague money clauses. Check your draft against these six before anyone signs:
- Downloaded template, unchanged. A generic format rarely covers goodwill, valuation on exit or a partner's death, which is exactly where families fight.
- No salary or interest clause. Partners pay themselves anyway, and the firm then struggles to justify the deduction in its return.
- Capital written as a round figure nobody paid. The deed says ₹10 lakh each, the bank shows ₹1 lakh. Stamp duty, books and the deed then disagree.
- One partner can sign alone for any amount. Fine for two brothers, risky with an outside investor.
- Address not matching the rent agreement. The GST officer asks for the same address on every document.
- Signed but never stamped. An unstamped deed cannot be relied on as evidence until the duty and any penalty are paid.
When is a free partnership deed template enough?
A template can work when two partners with equal capital and equal share run a simple business, trust each other, and have no outside money or property involved. Even then, read every clause and fill in the exit section yourself.
Pay for drafting when any of these apply: unequal capital or profit share, a partner bringing property or machinery instead of cash, a working partner and a sleeping partner, plans for a bank loan, a family firm with the next generation joining, or partners who are not related. If the plan is to raise investment or limit liability, a deed is the wrong vehicle; compare LLP registration first.
Partnership deed drafting in Delhi: how CA in Delhi helps
CA in Delhi passes your enquiry to a listed firm that handles partnership work. Khubchandani & Co. Chartered Accountants and Moneymji both list partnership firm formation in their services, and both sit close to our office at Netaji Subhash Place. The drafting fee is fixed and agreed with you before anyone starts writing.
- What you send: partners' PAN and Aadhaar, the business address with rent agreement or ownership proof, capital figures and the terms you have agreed.
- What you get back: a drafted deed, the stamp duty figure for your capital, a signing checklist, and the next steps for PAN, bank and GST.
- Optional follow-on: Registrar of Firms filing, GST registration, books and the firm's income tax return filing.
See both firms on our Delhi CA firms page. Partners from Pitampura and nearby blocks can walk in; read CA in Pitampura for directions.
Frequently asked questions
Is a partnership deed mandatory?
The law lets a partnership exist without a written deed, but in practice it is essential. Banks, the GST portal and the Income Tax Department all ask for the deed as proof of the firm's constitution, and without it every disagreement falls back on the Act's default rules.
What is the stamp duty on a partnership deed in Delhi?
It is 1% of the capital stated in the deed, with a ceiling of ₹5,000. If total capital is ₹500 or less, the ceiling is ₹200. A dissolution deed carries a flat ₹200. Confirm the figure when you generate the e-stamp.
Does a partnership deed need to be notarised?
The Partnership Act does not make notarisation a condition of a valid deed. Banks and many offices still expect a notarised copy, so most Delhi firms notarise at signing to avoid a second trip.
Can a partnership deed be made on plain paper?
It can be written, but an unstamped deed cannot be used as evidence until the stamp duty and any penalty are paid. Banks and GST officers will also ask for a stamped copy, so use e-stamp paper from the start.
How long does partnership deed drafting take?
Drafting itself is quick once terms are agreed. The time goes into partners reviewing the draft and arranging a common signing slot. Agree the term sheet first and the deed can usually be ready for signing within a few working days.
Can a minor be a partner in the deed?
A minor cannot be a full partner, but the Partnership Act allows a minor to be admitted to the benefits of a partnership with the consent of all partners. The deed should say so in a separate clause. Take advice before drafting this.
What is a supplementary partnership deed?
It is a new deed that changes the original one while the firm carries on, for example to add a partner, change the profit ratio or add capital. It needs fresh stamp duty and signatures from all current partners, and a registered firm should notify the Registrar.
Is a partnership deed the same as an LLP agreement?
No. A partnership deed is made under the Indian Partnership Act, 1932 and the firm is not a separate legal entity. An LLP agreement is filed with the MCA for a limited liability partnership, which is a separate body with limited liability for partners.
Can I register a partnership firm online in Delhi?
The deed, e-stamp and PAN steps can largely be done online. Registration with the Registrar of Firms runs through the district SDM headquarters office, which may need physical submission or verification. Check the current method with that office.