Converting a Partner to Nominal Partner – Zero Profit Sharing

Hello Experts,

I’m looking to restructure a partnership firm with two partners, where one of the existing partners will continue in name only, without any role in operations or decision-making. The idea is to convert the second partner into a nominal partner, with zero or minimal profit sharing (e.g., 1%), primarily to retain continuity without dissolving the firm.

I have a few queries regarding this:

1. Is there any formal procedure or provision under the Indian Partnership Act to designate someone as a "nominal partner"?

2. Can we revise the profit-sharing ratio to 100:0 or 99:1 (if zero is not legally allowed) through a supplementary deed, and explicitly relieve the partner from all responsibilities and liabilities?

3. Will such a deed be accepted by statutory authorities (e.g. Registrar of Firms, Income Tax Department)? Is notarization mandatory?

4. Are there any legal or tax implications of continuing with a nominal partner who has no actual profit, role, or liability?

Any guidance, formats, or practical insights from those who’ve handled similar cases would be greatly appreciated.

Thanks in advance!