Partnership Deed in Pakistan: Complete Guide for 2025

A Partnership Deed is a foundational document for any business operated jointly by two or more individuals. In Pakistan, forming a partnership firm requires more than just verbal agreement—it must be legally documented to avoid future conflicts and ensure smooth business operations. This guide explains everything you need to know about partnership deeds in Pakistan, including their components, legal requirements, registration process, and benefits.

What is a Partnership Deed?

A Partnership Deed is a written agreement between partners of a business that outlines the rights, responsibilities, profit-sharing ratios, and duties of each partner. It serves as a legal contract that governs the internal workings of the partnership firm and is usually signed at the time of business formation.

Legal Framework for Partnerships in Pakistan

Partnerships in Pakistan are regulated under the Partnership Act, 1932. According to this law:

• A partnership is formed when two or more individuals agree to carry on a business jointly and share its profits and losses.

• Although registration is optional, an unregistered firm cannot file a case in court to enforce contractual rights.

• Therefore, creating a written and registered partnership deed is highly recommended.

Key Elements of a Partnership Deed

A standard partnership deed in Pakistan should include the following clauses:

1. Firm Name and Business Address

Clearly state the name of the partnership firm and its principal place of business.

2. Details of Partners

Include full names, CNIC numbers, permanent addresses, and occupations of all partners.

3. Nature of Business

Mention the type of business activity the firm will engage in (e.g., trading, services, manufacturing).

4. Capital Contribution

Specify how much capital each partner is contributing to the business initially and whether future capital contributions are allowed.

5. Profit and Loss Sharing Ratio

Clearly define how profits and losses will be shared among the partners.

6. Duties and Responsibilities

Mention the role of each partner in day-to-day management, decision-making authority, and specific responsibilities.

7. Bank Account Operations

Specify how the firm’s bank account will be operated (e.g., joint signatures or individual authority).

8. Duration of Partnership

Indicate whether the partnership is formed for a fixed period, a specific project, or indefinitely.

9. Admission and Retirement of Partners

Outline the process and terms under which a new partner may join or an existing one may retire.

10. Dispute Resolution Clause

Mention how disputes among partners will be resolved—mediation, arbitration, or legal proceedings.

11. Dissolution Clause

Explain under what circumstances the firm may be dissolved and how assets and liabilities will be settled.

Stamp Paper Requirement

To be legally valid, a partnership deed must be:

• Typed on stamp paper worth at least Rs. 1,000 to Rs. 2,000 (depending on capital contribution).

• Signed by all partners.

• Witnessed by two individuals.

• Notarized by a Notary Public (if not registered with the Registrar).

Partnership Deed Registration Process in Pakistan

Although optional, registering the partnership deed with the Registrar of Firms under the Industries Department offers legal recognition and benefits.

Step-by-Step Process:

1. Prepare the Partnership Deed
   Draft the deed with all necessary clauses and print it on the prescribed stamp paper.

2. Fill Form-I
   This is the prescribed form for registration under the Partnership Act.

3. Attach Supporting Documents

   • Copy of CNICs of all partners

   • Electricity or utility bill as address proof

   • Proof of business premises (rent agreement or ownership document)

4. Submit to Registrar of Firms
   Submit the documents at the local office of the Registrar of Firms (usually located in the Deputy Commissioner’s office).

5. Pay Registration Fee
   A small fee (Rs. 1,000 – Rs. 2,500) may apply depending on the province.

6. Get Certificate of Registration
   Once approved, you’ll receive an official Certificate of Registration for your partnership firm.

Benefits of a Registered Partnership Deed

Registering a partnership deed offers multiple legal and operational advantages:

• Legal Enforceability in courts of law

• Clarity on profit-sharing and responsibilities

• Avoidance of Disputes through clearly defined roles

• Bank Account Opening in firm’s name

• Eligibility for Government Tenders and contracts

• Better Credibility with clients, suppliers, and financial institutions

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Partnership Deed Sample Format (Basic)

Here’s a simplified sample of a partnership deed format:

Final Words

A Partnership Deed is more than just a formality—it’s a legal framework that governs the relationship between partners and the functioning of the business. Whether you’re starting a small business or scaling up, having a well-drafted and preferably registered deed is essential for transparency, conflict resolution, and long-term success.

If you’re unsure about how to draft one, it’s best to consult a corporate lawyer or visit your local Registrar of Firms office for assistance.