Partner Retirement Deed Format 2026
DEED OF RETIREMENT
THIS DEED OF RETIREMENT is made at {{execution_place}} on 1 October 2026 BETWEEN:
(1) {{retiring_partner_name}}, residing at {{retiring_partner_address}}, holding PAN {{retiring_partner_pan}} (hereinafter referred to as the "Retiring Partner") of the ONE PART; AND
(2) {{partner1_name}}, residing at {{partner1_address}}, holding PAN {{partner1_pan}}; and (3) {{partner2_name}}, residing at {{partner2_address}}, holding PAN {{partner2_pan}} (hereinafter together referred to as the "Continuing Partners") of the OTHER PART.
WHEREAS the parties have been carrying on business in partnership under the name and style of "{{firm_name}}" (the "Firm") at {{business_address}} under a Deed of Partnership dated {{original_deed_date}} (the "Existing Deed");
AND WHEREAS the Retiring Partner has expressed the wish to retire from the Firm, and the Continuing Partners have consented to the retirement and have agreed to continue the business of the Firm, on the terms set out below;
NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:
1. Retirement
The Retiring Partner retires from the Firm with effect from the close of business on {{retirement_date}} (the "Retirement Date"), with the consent of all the other partners in accordance with Section 32(1) of the Indian Partnership Act, 1932. The retirement does not dissolve the Firm; the Continuing Partners shall continue the business under the same name with all its assets and liabilities.
2. Accounts Made Up to the Retirement Date
The books of the Firm have been made up to the Retirement Date, and a balance sheet as at that date has been drawn up, examined and accepted by all the parties as correct. The profit or loss, interest on capital and remuneration for the period up to the Retirement Date have been credited or debited to the Retiring Partner's account in accordance with the Existing Deed.
3. Settlement of Accounts
The amount due to the Retiring Partner in full and final settlement has been ascertained as under:
| Particulars | Amount (₹) |
|---|
| Balance in capital account as per the books (before the items below) | ____________ |
| Add: Balance in current / loan account, if any | ____________ |
| Add: Share of profit (or less: share of loss) up to the Retirement Date | ____________ |
| Add: Interest on capital up to the Retirement Date | ____________ |
| Add: Remuneration due up to the Retirement Date | ____________ |
| Add: Share of goodwill / revaluation of assets, if agreed | ____________ |
| Less: Drawings and amounts due to the Firm | ____________ |
| Less: Tax deducted at source on remuneration and interest | ____________ |
| Net amount payable to the Retiring Partner | {{settlement_amount}} |
____________ [if any asset of the Firm — for example a vehicle, a property or stock — is being handed over to the Retiring Partner instead of money, describe it here with its agreed fair market value, and take advice on Clause 8 before signing]
4. Payment
The Continuing Partners shall cause the Firm to pay the said sum of ₹{{settlement_amount}} to the Retiring Partner as follows: {{payment_terms}}. All payments shall be made by banking channels. Any instalment remaining unpaid after its due date shall carry interest at ______% per annum until payment. Until paid, the unpaid balance shall stand in the books of the Firm as a debt due to the Retiring Partner and not as capital.
5. Release by the Retiring Partner
In consideration of the said settlement, the Retiring Partner releases and relinquishes in favour of the Continuing Partners all his or her share, right, title and interest in the Firm, its business, goodwill, name, assets, properties, book debts and benefits of contracts, and confirms that, save for the amount payable under Clause 4, he or she has no claim of any nature against the Firm or the Continuing Partners.
6. Assets, Liabilities and Indemnity
All the assets of the Firm shall belong to, and all its debts and liabilities (whether existing, accruing or contingent, and including taxes and statutory dues for periods up to the Retirement Date) shall be discharged by, the Continuing Partners. The Continuing Partners shall, jointly and severally, keep the Retiring Partner indemnified against all such debts and liabilities and all actions, claims and costs in respect of them. The Retiring Partner shall remain answerable only for loss caused to the Firm by his or her own fraud or wilful default before the Retirement Date.
7. Public Notice and Intimations
The parties record that, under Section 32(3) of the Indian Partnership Act, 1932, the Retiring Partner and the Continuing Partners continue to be liable as partners to third parties for acts done after the retirement until public notice of the retirement is given. The Continuing Partners shall, at the cost of the Firm and within ______ days of this Deed: (a) give public notice of the retirement in the manner required by Section 72 of the said Act, including notice to the Registrar of Firms under Section 63 where the Firm is registered; (b) apply for amendment of the Firm's GST registration; and (c) intimate the Firm's bankers, principal customers, suppliers and licensing authorities. The Retiring Partner may give such notice himself or herself if the Continuing Partners fail to do so.
8. Income-tax
The parties record that any income-tax chargeable on the Firm in connection with this reconstitution — including under Section 45(4) or Section 9B of the Income-tax Act, 1961 or Section 67(10) or Section 8 of the Income-tax Act, 2025, as applicable — shall be borne by ____________ [the Firm and the Continuing Partners / the Retiring Partner / in agreed proportions], and that the settlement amount in Clause 3 has been agreed on that footing. The Firm shall furnish to the Retiring Partner the certificates for tax deducted at source on remuneration and interest for the period up to the Retirement Date. Each party shall bear the tax on his or her own income.
9. Firm Name, Records and Restraint
The Retiring Partner shall not use the name of the Firm or represent himself or herself as carrying on its business, and shall hand over all books, papers and property of the Firm in his or her possession. The Continuing Partners shall give the Retiring Partner reasonable access to the books for periods up to the Retirement Date for tax and legal purposes. ____________ [optional, under Section 36(2) of the Indian Partnership Act, 1932 — "The Retiring Partner shall not, for a period of ______ from the Retirement Date and within ______ (local limits), carry on any business similar to that of the Firm." The restriction must be reasonable in period and area to be enforceable.]
10. Continuing Partners
From the day following the Retirement Date, the Continuing Partners shall share the profits and losses of the Firm as follows: {{partner1_name}} — {{partner1_share}}; {{partner2_name}} — {{partner2_share}}. Save as altered by this Deed, the Existing Deed shall continue to bind the Continuing Partners. ____________ [if the terms between the Continuing Partners are changing in other respects, execute a fresh partnership deed alongside this one]
11. Disputes
Any dispute arising out of this Deed shall be referred to arbitration under the Arbitration and Conciliation Act, 1996, the seat of arbitration being {{execution_place}}.
12. Stamp Duty and Registration
This Deed is executed on non-judicial stamp paper of the value required under the Stamp Act applicable in the State of execution; the duty on a retirement or release instrument varies from State to State. Where the Firm owns immovable property, the parties shall take advice on the stamp duty and registration requirements of that State before execution.
IN WITNESS WHEREOF the parties have set their respective hands to this Deed on the day, month and year first above written.
_______________________________
{{retiring_partner_name}} (Retiring Partner)
_______________________________
{{partner1_name}} (Continuing Partner)
_______________________________
{{partner2_name}} (Continuing Partner)
Witnesses
1. Signature: _______________________________
Name: _______________________________
Address: _______________________________
2. Signature: _______________________________
Name: _______________________________
Address: _______________________________
