Partnership Deed

Concept of PartnershipDeed

Partnership deed is the legal agreement between the partners before starting the business. The partnership is started by the agreement between two or more people. As more people are involved in a business. The written agreement is made to solve a probable future dispute. Partnership deed asks as the evidential document for registration.

According to partnership act 2020, “the partnership deed must be submitted along with registration form before registration.”

Partnership deed covers all the information regarding registration of new partnership like names and address of business objectives, the capital contribution of partners etc. This paper is duly signed by all the members of the partnership to give legal approval. It is the most important document of partnership business.

Components of Partnership deed

  • Name and address of firm
    The name and the address of the firm should be clearly mentioned.
  • Name and address of partners
    It contains the name and address of all the partners.
  • Nature of business
    Nature of the business should be mention in the partnership deed whether it is industry or trade or service.
  • Duration of partnership
    Duration of a partnership firm should be defined whether it is fixed or uncertain.
  • Capital contribution by partner
    The amount of contribution as capital contributed by all the partners to establish the firm must be clearly written in the partnership deed.
  • Interest on capital
    The interest rate on capital must be clearly mentioned in the partnership deed so that any misunderstanding do not arise among the partners.
  • Method of profit and loss distribution
    The ratio of distributing the profit and loss should be mentioned clearly.
  • Right and duties of partners
    Right and duties of the partners should be mentioned in the partnership deed so that the misunderstanding do not arise in its absence.
  • Salary and commission of partners
    Salary and commission should be mention in partnership deed of all partners.
  • Admission and retirement of partners
    Some partners may be retired and new may be hired. So the procedure for the admission and retirement of the partner should be mentioned in the partnership deed.
  • The effect on the death of a partner
    The adjustment at the death of the partner and the payment for their success should be mentioned clearly in the partnership deed.
  • Valuation of goodwill
    The procedure for the valuation of goodwill during the admission, retirement and death should be clearly mentioned in partnership deed.
  • Revaluation of assets and liabilities
    The procedure for the revaluation of assets and liabilities during the admission, retirement and death should be clearly mentioned in partnership deed.
  • Accounts and audit
    The process of preparing the account and the provision of audit is to mention in the partnership deed clearly.
  • Settlement in case of dissolution
    The method of the dissolution of the partnership firm and the settlement of account should be mentioned clearly in the partnership deed.

Registration of partnership firm in Nepal

A partnership firm in Nepal is guided by partnership Act 2020, for the registration and renewable of partnership form in Nepal following steps should be taken:

Submission of application

It is the first stage of a registration process. The partners are required to take the prescribed form provided by the department of industry or commerce of Nepal Government. Along with the application form, following information must be provided

  • Name and address of partners as well as business.
  • The amount of capital Investment.
  • Type of partners and bear share in a business.
  • Name of the partner, representing the business.

Along with this information, partners are required to submitted their copy of citizenship certificates partnership deed if it has made

Submission of registration fee

The registration fee is to be deposited in NR bank in the name of concern department. The voucher of amount deposited must be submitted along with application form registration fee of partnership will verify in accordance with capital invested which is following:



Registration fee (Rs.)


Capital up to 1,00,000



Capital 1,00,001 to 3,00,000



Capital 3,00,001 to 5,00,000



Capital 5,00,001 to 10,00,000



Capital 10,00,001 to 50,00,000



Capital more than 50,00,000


Obtain registration certificate

After submitting application and registration fee voucher, the concerned authority of department will examine all the information provided. If the provided information is satisfactory the department will issue the certificates registration. It will work as an evidence for registration.

Renewable of partnership firm in Nepal

According to act 2020, the partnership firm must be renewed within 35 days of every fiscal year. While renewing partnership firm or detail, the firm is to be filled up and renewable fee must be paid. The renewable fee or partnership is presented in the following schedule

Capital Invested

Renewable fee

up to Rs 100000












Dissolution of Partnership Firm in Nepal

Dissolution is the process of ending up the partnership business. It is the termination of a partnership. According to the Act 2020, partnership firm will be dissolved under the following condition:

  1. Dissolution by agreement
  2. Dissolution by written notice
  3. Dissolution at any time
  4. Dissolution expiry of time
  5. Dissolution at once
  6. Dissolution by concerned department
  1. Dissolution by agreement:

A partnership firm can be dissolved by partners. According to partnership act, 2020 the partnership firm may dissolve either expiry of time or the termination of partnership deed.

  1. By written notice:

According to partnership act, 2020 partnership firm can be dissolved. Partners write the note of dissolution and submit to all other partners. In such situation partnership is consider as a dated notice provided to partner.

  1. Dissolution at any time:

The partnership firm can also be dissolved at any time when detail for dissolution is maintained by partnership deed. Followings are the most probable reason for the dissolution of partnership at any time.

  • In the ability of partners to pay debts and liability.
  • If the share of partners is sold or transfer to others name.
  • If partners are engaged in on lawful activities.
  • If the partners have got the punishment of imprisonment.
  1. Dissolution after expiry:

According to section 32 of partnership act 2020, the partnership form can be dissolved if specify time mention in partnership deed has expired.

  1. Dissolution at once:

The partnership firm may be dissolved when the active partner became insolvent or die.

  1. Dissolution by concerned department:

The concerned department of Nepal government may dissolve a partner under the following condition:

  • If the partnership has not submitted the renewable application with another necessary document every year.
  • If partnership firm is involved in unlawful activity.
  • If any partner of partnership has applied for dissolution.


Khanal, Soma Raj, Surendra Thapa Aslami and Sitaram Dhakal. Business Studies. Kathmandu: Taleju Prakashan, 2067.

Pant, Prem R., et al. Business Studies. Kathmandu: Buddha Academic Publishers and Distributors Pvt. Ltd., 2010.

  1. Partnership deed is the legal agreement between the partners before starting the business. 

Registration of partnership firm in Nepal 

  1. Submission of application
  2. Submission of registration fee
  3. Obtain registration certificate 

Dissolution of Partnership Firm in Nepal

  1. Dissolution at any time
  2. Dissolution expiry of time
  3. Dissolution at once
  4. Dissolution by concerned department
  • The partner who has limited liability towards the capital of business is called a ___________.

    limited partner
    secret partner
    Active partner
    Sleeping partner
  • The mutual rights and duties of partners are governed by partnership act________in the absence of partnership deed.

    2042 B.S
    2036 B.S
    2020 B.S
    2008 B.S
  • ___________are the rights of partners.

    Right to participate in management
    Right to share profts
    Right to excess views
  • ___________are the duties of partners.

    To compensate
    To work faithfully
    To share losses
  • A document which defines rights,duties,liabilities an mutual relationship of all partners is called _____________.

    Cooperative organization
    Partnership deed
    Multinational Company
    Sole Trading Concern
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