Urgent

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 Dear Sir,
Three partners out of total Five are being retired from the firm. Original partnership deed was drafted on the stamp paper of Rs. 750/-.
Now please advise me, I should draft disolution deed and reconstitution deed seperatly
or
I should draft a combined dissolution cum reconstitution deed on the stamp paper of Rs. 100/-

Please clarify.

Karan Teli

Karan Teli (Expert)
Follow

01 July 2013 You can do it either way. Their is no specific requirement. It's better you take up two different tthings. Start afresh completely

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 other experts what is your opinion?

Karan Teli

Karan Teli (Expert)
Follow

01 July 2013 Funny Mr. Anonymous

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 What funny ? If I am trying to get opinion of other experts for my quary.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
Follow

02 August 2025 Hi! For the retirement of partners and change in the partnership structure, here’s the usual approach:

* **Dissolution Deed** is used when the entire firm is dissolved (all partners end or the firm closes).
* **Reconstitution Deed** (or Partnership Variation Deed) is used when there is a change in the constitution of the firm (like retirement, admission, change in profit sharing).

In your case, since **only 3 out of 5 partners are retiring**, the firm is **not dissolved completely** but its constitution is changing.

### So, you should draft:

* **Only a Reconstitution Deed (also called Retirement Deed or Variation Deed)** reflecting retirement of the three partners and continuing partnership of the remaining two partners.

### Stamp duty:

* Since this is a **reconstitution deed** (not a dissolution), the stamp duty will depend on your **state's Partnership Act** rates for such deeds.
* Typically, a **reconstitution deed** attracts lower stamp duty than a full dissolution.
* The original deed was on Rs. 750/- stamp paper; for reconstitution, a separate deed on the appropriate stamp paper (often less than original) is enough.
* A combined dissolution + reconstitution deed is usually not necessary if the firm continues with remaining partners.

### Recommendation:

* Check your **state’s stamp act** for exact stamp duty for reconstitution deed.
* Usually, a **Reconstitution Deed on appropriate stamp paper (often Rs. 100 or as per local rules)** suffices.
* No need to draft separate dissolution deed unless firm is fully dissolved.

If you want, I can help you draft a simple reconstitution deed template!

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now