CHANGE PARTNER DEED
Partnership Deed is a fundamental document for the firm as it governs the firm’s operations and activities. The partners must abide by the clauses of partnership deed during its existence and must not act beyond the scope drawn. Hence, to extend or restrict the scope of activities or operations, partners may change the partnership agreement.
The changes in Partnership deed are made by execution of a supplementary deed which is an addendum to the original partnership deed. Payment of appropriate stamp duty is a must for said deed. The registration of the supplementary deed would be compulsory if the firm is already registered with Registrar of Firm.
Reasons of change in Partnership Deed
Change of Partners and rights and responsibilities
It is the most common reason for modification indeed. Any existing partner may be unable to continue or new partner may be required to be added with the growth of the business. In all these cases of appointment, addition, removal, resignation or death of a partner, supplementary partnership deed for a change of partners is executed.
Change Business Activity or name
As said, the firm cannot act beyond the scope drawn by the agreement. Thus, if required to undertake new business activity, the partners must amend the business clause of the partnership deed enumerating the new activities. Also, the modification may take place to restrict the scope of activities by removing discontinued activities.
Partner net worth is Increased
Where capital is the need of business, return is need for partners. The capital can be increased to expand business or other requirements. The change in capital mostly comes with change in profit sharing or ownership ratio, too. Both would require the change in partnership deed. The change in capital also demands payment of additional stamp duty to Government.
Change other clauses
Name of partnership or change in place of business, the addition of branch office etc. can be made effective through executing the supplementary deed. Other clauses cover change in term & conditions of appointment, resignation and notice period, the power of operations, jurisdiction of partnership, the manner of dissolution and duration of the partnership, etc.
Documents required to modify Partnership deed
Original Partnership deed with the modifications made, if any
Copy of PAN card of the firm to be provided
Proof from new partner
Copy of PAN card and address proof of new partner, if applicable