Sleeping Partner Partnership Deed for Pakistan

Sleeping Partner Partnership Deed Template for Pakistan

A Sleeping Partner Partnership Deed is a legal document used in Pakistan to establish and regulate a partnership arrangement where one or more partners (sleeping partners) contribute capital but do not participate in the daily management of the business. This document, governed by the Partnership Act 1932 of Pakistan, outlines the rights, responsibilities, and limitations of both active and sleeping partners, including capital contribution, profit-sharing arrangements, management restrictions, and liability limitations. It provides essential protection for sleeping partners while ensuring clear operational authority for active partners.

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What is a Sleeping Partner Partnership Deed?

The Sleeping Partner Partnership Deed is a crucial legal instrument in Pakistani business law, designed for situations where investors wish to participate in business profits while maintaining limited involvement and liability. This document, structured under the Partnership Act 1932 and related Pakistani legislation, creates a framework where sleeping partners can invest capital without participating in day-to-day operations. It typically includes detailed provisions about capital contribution, profit sharing, management restrictions, and liability limitations. The deed is particularly useful for family businesses, expansion projects, or situations where experienced entrepreneurs seek silent investors. The document must be properly executed and registered with relevant authorities in Pakistan to ensure legal validity and protection of all parties' interests.

What sections should be included in a Sleeping Partner Partnership Deed?

1. Parties: Identification of all partners, including both active partners and the sleeping partner(s), with their complete details and addresses

2. Background: Context of the partnership formation, nature of business, and the intention to include a sleeping partner

3. Definitions: Key terms used throughout the deed, including 'Sleeping Partner', 'Active Partners', 'Business', 'Capital Contribution', etc.

4. Partnership Business: Detailed description of the business activities and scope

5. Capital Contribution: Details of capital contributed by each partner, including the sleeping partner's investment

6. Profit and Loss Sharing: Ratio and terms of profit/loss distribution among partners

7. Role and Limitations of Sleeping Partner: Clear definition of the sleeping partner's non-participation in management and limited liability

8. Management Rights: Specification that active partners will manage the business and make decisions

9. Banking Arrangements: Details of partnership bank accounts and signing authorities

10. Books of Accounts: Provisions for maintaining accounts and the sleeping partner's right to inspect

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

12. Governing Law: Specification that the deed is governed by Pakistani law

13. Dispute Resolution: Mechanism for resolving disputes between partners

14. Execution: Signature blocks and attestation requirements

What sections are optional to include in a Sleeping Partner Partnership Deed?

1. Death and Incapacity: Procedures in case of death or incapacity of any partner - important for family businesses

2. Transfer of Interest: Rules for transferring partnership interest - include if partners want specific restrictions

3. Non-Competition: Restrictions on partners engaging in competing businesses - relevant for specialized industries

4. Intellectual Property Rights: Ownership and use of IP - include if business involves significant IP assets

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

6. Amendment Procedure: Process for modifying the deed - include if flexibility is needed for future changes

7. Confidentiality: Protection of business secrets - important for sensitive business information

8. Exit Strategy: Detailed procedures for partner exit - important for larger investments

What schedules should be included in a Sleeping Partner Partnership Deed?

1. Schedule A - Capital Contributions: Detailed breakdown of each partner's capital contribution, including valuation of non-cash assets

2. Schedule B - Profit Sharing Formula: Detailed calculation method for profit distribution and any special allocations

3. Schedule C - Business Assets: List of all assets owned by the partnership at formation

4. Schedule D - Business Plan: Overview of business objectives and operational strategy

5. Appendix 1 - Partner Information: Detailed information about all partners including contact details and nominee information

6. Appendix 2 - Bank Account Details: Partnership bank account information and authorized signatories

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

Pakistan

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Retail

Real Estate

Technology

Healthcare

Agriculture

Construction

Trading

Professional Services

Hospitality

Education

Transport and Logistics

Food and Beverage

Relevant Teams

Legal

Finance

Corporate Affairs

Compliance

Risk Management

Business Development

Investment

Operations

Corporate Governance

Administrative

Relevant Roles

Business Owner

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Company Secretary

Investment Manager

Business Development Manager

Finance Director

Compliance Officer

Risk Manager

Partnership Registry Officer

Corporate Lawyer

Investment Advisor

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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