14 November 2013
Can a partnership deed with 5 partners, where partner no.1 with (fifty) 50 % stake in the f the registered firm having only land as asset and to be developed, which is having the following clause quoted, be treated as will, which will be detrimental to the interest of other legal heirs.? "X" has three brothers and one sister. Quote " In case of incapacity or death of partner 1, her son "X" will be admitted as a full-fledged partner and he will enjoy all rights and priveleges that are given to partner 1 by this deed till that date and that the same profit sharing ratio of 50 %"
18 November 2013
A will is a document signed by the person who makes the testament with two witnesses. A partnership deed cannot have a "will like " clause as the same only an agreement amongst the partners. Therefore the clause has limited meaning i.e. the "X" will be a nominee after the event of incapacitation or death and if there is no will of this person, it will held that the " X " is a nominee and should share the same with other legal heirs.
03 August 2025
No, the clause in the **partnership deed** that states:
> *“In case of incapacity or death of partner 1, her son 'X' will be admitted as a full-fledged partner and he will enjoy all rights and privileges that are given to partner 1 by this deed till that date and that the same profit sharing ratio of 50%”*
**cannot be treated as a will.**
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### ⚖️ Legal Reasoning:
1. **Will vs. Partnership Agreement** A **will** is a **testamentary document** governed by the **Indian Succession Act**, which becomes operative **only upon death** and can be **revoked or changed** anytime before death. A **partnership deed** is a **contract** between living parties under the **Indian Partnership Act**. It cannot replace or override succession laws applicable to the deceased's estate.
2. **The Clause Functions as a Nomination** The clause essentially acts like a **nomination** or **preference** expressed by the partners that in the event of Partner 1’s death, her son may be **considered for admission as a partner**.
* However, **admission of a partner after death of an existing partner is not automatic**—the **consent of the surviving partners** is still typically required unless the partnership deed provides otherwise. * Even if X is admitted, he does **not inherit the 50% share** of Partner 1 **automatically or absolutely**, unless it is **explicitly bequeathed in a valid will** or devolves under succession law.
3. **Effect on Legal Heirs** The land (which is the asset of the firm) and the 50% stake of Partner 1, after her death, becomes part of her estate. If there is **no will**, succession would be as per **personal succession laws** (e.g., Hindu Succession Act, if applicable), and **all legal heirs**—not just X—would have a claim to her interest in the partnership.
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### 🔍 Key Takeaways:
* This clause **does not amount to a will**. * It **cannot override** succession laws. * X **may be admitted** as a partner if the surviving partners agree or as per deed, but that doesn’t give him **sole ownership of deceased partner’s 50% stake**. * Other legal heirs **still have a valid legal claim** on Partner 1’s share.
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If there is concern about protecting the rights of all legal heirs, the estate of Partner 1 should be **probated or administered through succession certificate**, and not rely solely on such a clause.