Partnership deed

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2013 We are drafting the Partnership Deed today. Can you please guide me in drafting the remuneration Clause applicable under Income Tax Act & Partnership Act. The Partners' Profit Sharing Ratio is 5:1:4

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 May 2013 THAT Mr. A, Ms. B and Mr.C, the parties of the first, second and third part respectively, have agreed to keep themselves actively engaged in conducting the affairs of the business of the partnership firm.

THAT the above said parties shall be 'working partners' of the firm.

THAT it is hereby agreed to that in consideration of the said parties keeping themselves actively engaged in the business of the partnership firm and working as 'working partners', they shall be entitled to remuneration.

THAT the remuneration payable to the said 'working partners' shall be computed in the manner laid down in section 40(b)(v), read with explanation 3 of the Income tax Act,1961 or any other applicable provision as may be in force in the income tax assessment of the partnership firm for the relevant accounting year.

THAT the amount of remuneration computed as per the foregoing clause shall be distributed between the said working partners in the following proportion:

Mr. A -- 50% of the total remuneration.
Ms. B -- 10% of the total remuneration.
Mr. C -- 40% of the total remuneration.

THAT the share of remuneration of each working partner, as arrived at by the foregoing clause, shall be either paid in cash or shall be credited to the current account of the working partner's as may be mutually decided by them from time to time.

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