80 20 Partnership Agreement for India

80 20 Partnership Agreement Template for India

A comprehensive legal document governed by Indian law that establishes a partnership arrangement with an 80:20 profit-sharing ratio between partners. This agreement is structured under the Indian Partnership Act, 1932, and defines the terms of collaboration, including capital contributions, management responsibilities, profit and loss distribution, and operational procedures. The document incorporates specific provisions for unequal profit sharing while ensuring compliance with Indian partnership laws and regulations, making it particularly suitable for businesses where partners have different levels of involvement or investment.

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80 20 Partnership Agreement

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What is a 80 20 Partnership Agreement?

The 80:20 Partnership Agreement is a specialized form of partnership contract commonly used in India when establishing business relationships with unequal profit sharing. This document is essential when partners intend to formalize a partnership where one party takes a majority share (80%) of profits and losses, often in recognition of higher capital contribution, expertise, or business risk, while the other partner receives a minority share (20%). The agreement is structured under Indian partnership law and covers crucial aspects such as capital contributions, management rights, profit distribution mechanisms, decision-making processes, and exit provisions. It's particularly useful for startups, professional services firms, and businesses where partners have significantly different levels of involvement or investment. The document ensures compliance with the Indian Partnership Act, 1932, while protecting both partners' interests through clearly defined terms and conditions.

What sections should be included in a 80 20 Partnership Agreement?

1. Parties: Identification and details of all partners entering into the 80:20 partnership agreement

2. Background: Context of the partnership formation and the business purpose

3. Definitions: Definitions of key terms used throughout the agreement

4. Partnership Structure: Details of the 80:20 profit sharing ratio and capital contribution arrangements

5. Business of the Partnership: Scope and nature of the partnership business

6. Capital Contributions: Initial and ongoing capital contribution requirements for each partner

7. Profit and Loss Sharing: Detailed mechanism for the 80:20 profit and loss distribution

8. Management and Control: Decision-making processes and management responsibilities of partners

9. Rights and Obligations: Specific rights and duties of each partner

10. Banking and Financial Matters: Banking arrangements and financial management procedures

11. Accounts and Records: Requirements for maintaining partnership accounts and records

12. Term and Termination: Duration of partnership and conditions for termination

13. Dispute Resolution: Procedures for resolving disputes between partners

14. Governing Law: Specification of Indian law as the governing law

15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a 80 20 Partnership Agreement?

1. Non-Compete and Confidentiality: Restrictions on partners' competitive activities and handling of confidential information - used when intellectual property or trade secrets are involved

2. Intellectual Property Rights: Ownership and management of IP created during the partnership - relevant for technology or creative businesses

3. Insurance: Requirements for business insurance coverage - important for high-risk businesses

4. Assignment and Transfer: Rules for transferring partnership interests - useful for larger partnerships or when future ownership changes are anticipated

5. Death and Incapacity: Procedures in case of death or incapacity of a partner - important for long-term partnerships

6. Additional Capital Contributions: Procedures for requesting and making additional capital contributions - relevant for businesses expecting growth or expansion

7. Third Party Rights: Rights of external parties in relation to the partnership - relevant when dealing with external stakeholders

What schedules should be included in a 80 20 Partnership Agreement?

1. Schedule 1 - Capital Contributions: Detailed breakdown of initial capital contributions by each partner

2. Schedule 2 - Profit Sharing Mechanism: Detailed calculation method for the 80:20 profit distribution

3. Schedule 3 - Business Plan: Initial business plan and objectives of the partnership

4. Schedule 4 - Management Responsibilities: Detailed allocation of management duties and responsibilities

5. Schedule 5 - Assets Register: List of assets contributed to or owned by the partnership

6. Appendix A - Partnership Bank Account Details: Banking arrangements and authorized signatories

7. Appendix B - Compliance Requirements: List of regulatory and statutory compliance requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology and Software Development

Professional Services

Manufacturing

Retail and E-commerce

Real Estate and Construction

Consulting Services

Healthcare Services

Education and Training

Hospitality and Tourism

Financial Services

Relevant Teams

Legal

Finance

Business Development

Operations

Compliance

Risk Management

Corporate Secretarial

Strategic Planning

Investment

Partnership Management

Relevant Roles

Business Owner

Managing Partner

Chief Executive Officer

Chief Financial Officer

Business Development Manager

Legal Counsel

Company Secretary

Finance Director

Operations Manager

Partnership Manager

Compliance Officer

Risk Manager

Business Consultant

Investment Manager

Entrepreneur

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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