Partnership deed in Tanzania (guide, sample & pdf)

Here you will learn everything you need to know about Partnership Deed also known as Partnership Agreement, in Tanzania.

I will cover

• meaning of Partnership Deed
• Contents of Partnership Deed
• Importance of Partnership Deed
• sample of Partnership Deed
• etc.

Let’s get started

Read: Comprehensive Partnership law notes in Tanzania

Meaning of Partnership Deed

A partnership deed is a legal document that outlines the terms and conditions under which a partnership operates.

A partnership is a type of business structure in which two or more individuals manage and operate a business following the terms and objectives set out in a Partnership Deed.

This document is also sometimes referred to as a partnership agreement.

Contents of Partnership Deed

The specific contents of a partnership deed may vary based on the preferences and agreements of the partners.

However, here is a comprehensive list of common elements found in a partnership deed:

1. Name and Address of the Partnership
   • Clearly state the official name and registered address of the partnership.

2. Names and Addresses of Partners:
   • Provide the full names, addresses, and other relevant details of each partner.

3. Nature of Business:
   • Describe the primary business activities that the partnership will engage in.

4. Date of Commencement:
   • Specify the date on which the partnership officially begins its operations.

5. Duration of Partnership:
   • Indicate whether the partnership is formed for a specific period or is intended to be ongoing.

6. Capital Contributions:
   • Outline the amount of capital that each partner is contributing to the partnership.

7. Profit and Loss Sharing:
   • Define the ratio or percentage in which profits and losses will be shared among the partners.

8. Management and Decision-Making:
   • Clarify the roles, responsibilities, and decision-making authority of each partner.

9. Drawings and Salaries:
   • Specify the guidelines for partner withdrawals (drawings) and any salary or compensation arrangements.

10. Interest on Capital and Loans:
    • Address the interest payable on capital contributions or loans made by the partners to the partnership.
11. Banking and Financial Management:
    • Define how banking transactions will be handled and the financial management procedures of the partnership.
12. Books of Accounts and Auditing:
    • Specify the method of maintaining books of accounts and whether external auditing will be conducted.
13. Admission of New Partners:
    • Outline the procedures and criteria for admitting new partners into the partnership.
14. Withdrawal/Retirement of Partners:
    • Describe the process for partners wishing to withdraw or retire from the partnership.
15. Dissolution of Partnership:
    • Provide the procedures for dissolving the partnership, including the distribution of assets and settlement of liabilities.
16. Dispute Resolution:
    • Specify the mechanism for resolving disputes among the partners.
17. Non-Compete and Confidentiality:
    • Include clauses preventing partners from engaging in competing businesses and disclosing confidential information.
18. Indemnity:
    • Define the indemnity obligations of partners in case of legal claims or liabilities.
19. Miscellaneous Provisions:
    • Cover any other specific agreements or provisions deemed necessary by the partners.

Importance of Partnership Deed

Generally, a partnership deed is crucial for establishing a clear, organized, and legally recognized framework for the partnership.

It helps prevent conflicts, protects the interests of partners, and provides a roadmap for the successful operation, changes, and potential dissolution of the partnership.

The followinga are the Importance of Partnership Deed

• The partnership deed clearly defines the rights, responsibilities, and obligations of each partner. This clarity helps prevent misunderstandings and disputes among partners.
• A partnership deed provides legal recognition to the existence of the partnership. It serves as evidence of the agreement and helps establish the legal framework within which the partnership operates.
• The deed outlines the structure of the partnership, including the nature of business activities, capital contributions, profit-sharing arrangements, and management responsibilities. This ensures that all partners are on the same page regarding the fundamental aspects of the business.
• In the event of disagreements or disputes among partners, the partnership deed serves as a reference point for resolution. It typically includes provisions for dispute resolution mechanisms, helping to maintain harmony within the partnership.
• The deed specifies the financial arrangements, such as capital contributions, profit distribution, and rules for drawings and salaries. This helps in creating a transparent financial framework and avoids financial disputes.
• Procedures for admitting new partners or allowing existing partners to withdraw are outlined in the partnership deed. This ensures a structured approach to changes in partnership composition.
• A well-drafted partnership deed ensures that the partnership complies with applicable laws and regulations. It helps in avoiding legal issues by addressing legal requirements related to partnerships.
• The partnership deed serves as a tool for protecting the interests of all partners. It helps prevent one partner from taking actions that may adversely affect the others, as the agreed-upon terms are documented.
• Without a partnership deed, the partnership may be subject to default provisions outlined in the Law of Contract Act, CAP 345 R.E 2019, which may not align with the partners’ intentions. A partnership deed allows partners to explicitly define terms, preventing reliance on implied terms.

Sample of Partnership Deed in Tanzania (two partners)

The following is an example of a Partnership Deed in Tanzania between two partners in the stationeries business.

DEED  OF  PARTNERSHIP

THIS DEED OF PARTNERSHIP made the 13^th day of May, 20.. BETWEEN SARA  MICHAEL  KIMAR0 of P.O. Box 5000 Hai (hereinafter called “the first Partner”) of the one part and IRENE EMANUEL MCHARO also of P.O. Box 5000 Hai (hereinafter called “the second Partner”) of the other part WITNESSETH that the first Partner and the second Partner (hereinafter jointly called “the Partners”) shall become partners in the business of dealing in stationeries on the following terms:-

1. The partnership shall be deemed to have commenced on the 14^th   day of March, 20… and shall continue until determined as hereinafter provided.

2. The name of the firm shall be TWINS STATIONERY AND SECRETARIAL SERVICES.

3. The principal place of the partnership business shall be premises on Plot No. 134 Block ‘A’ Boma Ng’ombe, Hai District or such other place as the partners may from time to time decide.

4. The business of the firm shall be dealing in stationeries generally and such other business or businesses related thereto as the partners may from time to time agree upon.

5. The capital of the partnership shall be contributed by the partners equally and all profits and losses including loss of capital shall also be shared by the partners equally.

6. The partnership Bank Account shall be operated by both partners and cheques drawn on the partnership Bank Account shall be signed by the first Partner, that is to say, SARA  MICHAEL  KIMAR0 only.

7. The usual books of account shall be kept properly posted up and shall not be removed by either partner from the place of business without the consent of the other partner.  Each partner shall have free access to them at all times and shall be at liberty to make such extracts therefrom as he or she may think fit.

8. If any partner out of the two partners shall die during the continuance of the partnership his or her share in the capital assets and profits shall accrue to and vest in his or her legal personal representative without any payment on his or her part.

9. If any partner shall desire to retire during the continuance of the partnership the other partner shall have the first right to purchase the share of the retiring partner in the capital assets and profit of the partnership at a price of the assets, credits, debts, liabilities and transaction of the partnership {but with taking goodwill into account} and such price shall be paid by the continuing partner to the retiring partner.

10. Each partner shall be just and faithful to the other partner and in all transactions relating the partnership business and at all times give to the other partner a true account of all dealings.

11. Neither partner shall without the consent to the other –
    • Waive the whole or any part of any debt or sum due to the partners.
    • Except in the ordinary course of business of trade dispose of by loan, pledge or sale or otherwise of any part of the partnership property.
    • Become bail guarantor or surety for any person or to do or knowingly suffer anything whereby the partnership property may be endangered.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands and respectively signed these presents the day month and year hereinafter appearing.

SIGNED and DELIVERED by the said       )

SARA  MICHAEL  KIMAR0 in   )

my presence this 13^th  day of  May, 20..   )        _________________
1st Partner

Signature: ……………..……….….…………….

Postal Address: ……….………..…….…………

                           ………………………………….

Qualification: COMMISSIONER  FOR  OATHS

SIGNED and DELIVERED by the said       )

IRENE EMANUEL MCHARO in     )

my presence this 13^th  day of  May, 20..     )        _________________
2nd Partner

Signature: …………………..…….…………….

Postal Address: ……….……….…….…………

                              ……………………………….

Qualification: COMMISSIONER  FOR  OATHS

Sample of Partnership Deed in Tanzania (three partners)

The following is an example of a Partnership Deed in Tanzania between three partners in the business of mining and dealing in gold and gemstones.

Partnership deed in Tanzania pdf

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Conclusion

My aim here was to share with you everything you need to know about Partnership deed in Tanzania.

And i hope you have found this post useful.

But before you go;

Is there any specific sample of partnership deed do you need?

or is do you have any question regarding parethsp deeed in Tanzania?

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