Remember the moment when you and your co-founder first decided to build something together? Maybe it was over coffee, or during a late-night brainstorming session. It was all real and not just the talks. You had the idea, the chemistry, and the zeal to make it happen.
But then someone asked, “Have you put anything in writing?” And suddenly, where there was only excitement, anxiety slipped in. A flood of questions rushed through your mind. The thought of legal documentation, hiring lawyers, and all the formalities felt expensive, time-consuming, and, honestly, overwhelming, especially when you’re just trying to get your startup off the ground.
Here is what most founders don't talk about: A partnership deed. In moments like these, it feels easier to put off drafting a partnership deed. After all, you trust each other and share the same vision. Why complicate things with legal paperwork when you should be focusing on building your product or landing your first client?
We get it. Legal documentation is not why you started a business. You did not become an entrepreneur to wade through clauses and compliance. And when you are bootstrapping, spending Rs. 25,000 - Rs. 50,000 on legal formalities feels like money that should go toward your business.
But here is what happens without that partnership deed. A few months in, one partner wants to bring in an investor, while the other does not, or someone is contributing more time than expected and feels the profit split is no longer fair. The worst-case scenario is that a friendship ends, and there is no written agreement to guide what happens next. These are not hypothetical scenarios. They are the reality for countless startups that skipped this step.
Is this how you want your startup story to end?
If your answer is no, here’s the good news: Drafting a partnership deed does not have to drain your finances or take weeks of back-and-forth meetings with lawyers anymore. Why?
Because we have designed LawSimpl to make the entire process fast, affordable, and hassle-free.
What is a Partnership Deed and why does it matter?
A partnership deed is a written and legally binding document that outlines the terms, conditions, and operational framework agreed upon by the partners, governing how the business will be managed and run.
It is a kind of comprehensive startup rulebook that will outline things like who is responsible for what, how you will split profits, how much capital you have invested, what happens if someone wants to leave, and how you will resolve disagreements.
It is of utmost importance because, in moments of excitement and alignment with your partner’s vision, it’s easy to overlook potential issues. As time passes, businesses evolve, pressures mount, and what seemed obvious in month one becomes disputable in month six. Under the Indian Partnership Act, 1932, if you do not have a written partnership deed, the law makes certain default assumptions about your partnership, such as
If you do not have an agreement on profit sharing, the law assumes equal distribution regardless of who contributed more capital or effort.
Similarly, if you have no agreement about decision-making, then every partner has equal authority, which can lead to deadlock.
While starting a business, apart from enthusiasm and an idea, legal awareness is also necessary. A formal partnership deed isn’t about distrusting your partner; it’s about showing respect for your business so that it does not end up in the dark. It ensures that you focus on growth rather than dispute resolution every other day.
The smart way for startups to draft a Partnership Deed
Now, you know why you need a partnership deed, but where most founders face an obstacle is drafting a legally sound partnership deed, customised to your specific needs, and that does not require a law degree to understand.
Let’s be honest about the traditional process. You schedule a consultation, explain your entire business model, answer dozens of questions, and then wait. A week later, you receive a draft packed with dense legal language. You read it, get confused, send questions back, and wait again. Revisions come, more questions arise, and the cycle continues.
By the time you have a final document, weeks have passed, and you’ve spent a significant amount on legal fees. And yet, there’s still uncertainty whether the deed fully reflects your unique situation or is just a standard template with minor adjustments.
How to get it right without wasting time or money?
Instead of working with generic templates, you can use LawSimpl, your smart AI-powered legal advisor, which not just drafts but gives you a legally reasoned answer for all your doubts.
A simple prompt like
I am entering into a partnership with a friend to open a food outlet in Rishikesh, Uttarakhand. We will two partners only. The food outlet will be a south indian restaurant, in rishikesh, uttrakhand, I need you to draft a partnership deed for the same.
and the system will give you an editable draft template, which will have clauses tailored specifically for your needs, such as
This Deed of Partnership is made at [[Rishikesh]], Uttarakhand on this [[date]] by and between:
[[Partner 1 Name]], Aadhar No. [[Aadhar 1]], PAN [[PAN 1]], residing at [[Address 1]] (hereinafter referred to as the "First Partner"); and
[[Partner 2 Name]], Aadhar No. [[Aadhar 2]], PAN [[PAN 2]], residing at [[Address 2]] (hereinafter referred to as the "Second Partner").
The parties hereby agree as follows:
Name of the Firm: The name of the partnership firm shall be [[Firm Name]].
Business Address: The principal place of business shall be at [[Full Address, Rishikesh, Uttarakhand]].
Nature of Business: The firm shall carry on the business of running a South Indian restaurant, including preparation, cooking, sale, and delivery of food and beverages, and all activities incidental or ancillary thereto.
and many more clauses like these that will include profit and loss sharing, management and authority, dissolution, governing law, amendments, dispute resolution, Intellectual Property Rights, Non-compete, force majeure, etc.
All the 'double squared brackets-[[ ]]' are 'editable placeholders' that can be edited in the system itself.
LawSimpl's platform is trained on the Indian Partnership Act, 1932, relevant judgments, and current regulatory requirements. Every clause it generates is compliant with Indian legal standards. You don't have to worry about whether you are missing a mandatory provision or using an overruled one. Even if you are worried then you can use the 'enforceability' and 'legal support' feature to get all your worries sorted.
Wondering what these are?
Enforceability: This feature explains how each provision will be enforced and provides a clear, detailed breakdown. For example, if the Admission, Retirement, and Expulsion of Partners provision in your initial draft is like
Admission, Retirement, and Expulsion of Partners:
a. No new partner shall be admitted except with the written consent of both partners.
Then, after using the 'enforceability' provision, it will be like
Admission, Retirement, and Expulsion of Partners:
a. No person shall be admitted as a new partner into the firm without the prior written consent of all existing partners. Such admission shall be formalized by executing an appropriate amendment to this deed.
Such a detailed explanation will be provided for every clause and sub-clause.
Legal Support: It ensures that you are aware and updated about the legal statutes and principles used to draft the clauses in your deed. For example,
Admission, Retirement, and Expulsion of Partners:
c. Expulsion of a partner shall be only for gross misconduct and with the consent of the other partner..
Then, by using the 'legal support' feature, you can know what statute guides this clause. For the above-mentioned clause, the AI will show
This provisio is in accordance with Section 33 of the Indian Partnership Act, 1932, which states that a partner may not be expelled by a majority of the partners except in the exercise of powers conferred by a contract between the partners in good faith. The provisions of sub-sections (2), (3), and (4) of Section 32 (governing retirement) shall apply to an expelled partner as if he were a retired partner.
This clearly shows that LawSimpl is not just automating the legal procedure, in fact, it is guiding the professionals towards a smarter and more efficient approach.
If you go through a traditional route, that may cost you Rs. 25,000 - Rs. 50,000 and 2-4 weeks of waiting. But with LawSimpl, it will cost you a fraction of that and get you a customised, legally compliant partnership deed in a single session. Moreover, you are not sacrificing quality for speed.
Your startup deserves better than handshake agreements and postponed paperwork. Get started with LawSimpl now and have your legally sound agreement ready before the day ends.
Get started with LawSimpl!