Supplementary Partnership Deed (2026): Adding or Removing a Partner, Changing Shares, Name or Address, With Format and Checklist

Supplementary Partnership Deed (2026): Adding or Removing a Partner, Changing Shares, Name or Address, With Format and Checklist

Short answer: a supplementary partnership deed records a change to your existing partnership deed: a new partner joining, a partner retiring, a change in profit-sharing ratio or capital, or a new firm name or address. Every partner signs it, it is executed on stamp paper as per your state’s stamp law, and it becomes part of the original deed. The firm keeps its PAN and GSTIN, because legally it is the same firm, reconstituted. But the deed is only the first step. Within 15 days you must file a GST amendment, and you also need to inform the Registrar of Firms, your bank and the Udyam portal. A retiring partner who skips the public notice stays liable for the firm’s debts to outsiders. This guide covers each change, a deed format, and the checklist that follows.

This is general information, not legal or tax advice. A change of partners involving property, goodwill or large capital payouts has tax consequences, so involve your CA before you sign.

When you need a supplementary deed

The two-partner case catches many families out. If a firm has two partners and one retires or dies, the firm is dissolved. To continue the same business as a firm, bring in the new partner before or on the same date as the old one leaves, so that there are always at least two partners and the firm is reconstituted rather than dissolved.

What the supplementary deed must say

• Reference to the original deed: its date, and any earlier supplementary deeds, so the chain is clear.
• Names, addresses and PAN of all partners after the change, with the incoming or retiring partner identified.
• The effective date of the change. GST, the bank and the income tax return all need this date.
• The new profit and loss sharing ratio, adding up to 100%.
• Capital: what the new partner brings in, or how and when the retiring partner’s capital and share of profits will be paid out.
• Goodwill and revaluation, if the partners have agreed to adjust them.
• Remuneration and interest on capital, if they change. For income tax, these must be authorised by the deed and stay within the limits allowed, so restate them clearly.
• Bank operations: who will operate the account from the effective date.
• A clause that all other terms of the original deed continue unchanged.
• Signatures of all partners, including the incoming and the retiring partner, with two witnesses.

Supplementary partnership deed format

This sample covers a common case: one partner retires and a new partner joins on the same date. Remove the parts you don’t need.

SUPPLEMENTARY DEED OF PARTNERSHIP

This Supplementary Deed is made at [place] on [date] between:

1. [Name], son/daughter of [ ], residing at [ ], PAN [ ]
   (Continuing Partner)
2. [Name], son/daughter of [ ], residing at [ ], PAN [ ]
   (Continuing Partner)
3. [Name], son/daughter of [ ], residing at [ ], PAN [ ]
   (Retiring Partner)
4. [Name], son/daughter of [ ], residing at [ ], PAN [ ]
   (Incoming Partner)

WHEREAS the parties 1 to 3 have been carrying on business in
partnership under the name M/s [firm name], at [principal place of
business], under a Deed of Partnership dated [date] (the "Original
Deed") [and supplementary deed(s) dated [ ]], with GSTIN [ ] and
PAN [ ];

AND WHEREAS party 3 has expressed the desire to retire from the
partnership and party 4 has agreed to join, and all parties have
agreed to record the change on the following terms:

NOW THIS DEED WITNESSES:

1. Retirement: Party 3 retires from the partnership with effect from
   [effective date]. His/her capital account, including his/her share
   of profit up to that date, shall be settled as follows: [amount,
   mode and timing of payment]. Party 3 shall have no further claim on
   the firm, its assets or goodwill after settlement. [Goodwill:
   settled at Rs [ ] / not to be valued.]

2. Admission: Party 4 is admitted as a partner with effect from
   [effective date] and shall contribute capital of Rs [ ] by [date].

3. Profit-sharing ratio: From [effective date], profits and losses
   shall be shared as follows:
   Party 1: [ ]%   Party 2: [ ]%   Party 4: [ ]%

4. Remuneration and interest: [Restate the clauses on working
   partners' remuneration and interest on capital, as now agreed.]

5. Bank account: The firm's bank account(s) shall be operated by
   [names], [jointly/severally], from [effective date].

6. Continuity: The firm shall continue under the same name, at the
   same place of business, and all other terms of the Original Deed
   shall continue to apply to the continuing and incoming partners.

7. The retiring partner shall give public notice of his/her
   retirement and the continuing partners shall inform the Registrar
   of Firms, the GST department, the bank and other authorities.

IN WITNESS WHEREOF the parties have signed this deed on the day and
year first written above.

1. ____________  2. ____________  3. ____________  4. ____________

Witnesses:
1. Name, address, signature
2. Name, address, signature

Stamp duty on a supplementary deed

Stamp duty is a state subject, so the stamp paper value depends on where the deed is executed. A supplementary deed is itself an instrument of partnership, and a retirement is often charged separately as well. Where duty is linked to capital, it is generally calculated on the new capital being brought in, not the firm’s whole capital. Some examples from state stamp schedules as revised in 2024:

Many websites still quote the older figures, such as the ₹15,000 Maharashtra cap or ₹300 in Tamil Nadu. If a retiring partner takes away property such as land or a building instead of money, that part is usually charged like a conveyance on market value, which is far more expensive. Buy e-stamp paper through your state’s official channel or Stock Holding Corporation’s e-stamping outlets, in the name of one of the partners.

After signing: the checklist most firms miss

1. GST amendment within 15 days

Any change in registration particulars has to be reported in Form GST REG-14 within 15 days. Addition, deletion or retirement of partners is a core field, so it needs the officer’s approval: the officer should approve within 15 working days, or raise a query in REG-03, and if the officer takes no action in time the amendment is deemed approved. Upload the supplementary deed, the new partner’s PAN, Aadhaar and photo, and complete their Aadhaar authentication when the link arrives. A change of firm name or principal place of business is also a core-field amendment. If your registration also lists the retiring partner as authorised signatory, change that too, since the GST notices, OTPs and return filing depend on it.

2. Registrar of Firms

If your firm is registered under the Indian Partnership Act, 1932, the Registrar has to be told about changes: Section 63 covers a change in the constitution of the firm (partners joining or leaving), Section 60 covers a new firm name or principal place of business, and Section 62 covers changes in partners’ names and addresses. Notice of a change in constitution is filed in the state’s prescribed form (Form V in many states, such as Delhi). The central Act sets no deadline, but some states, Maharashtra among them, do, and an unrecorded change can cause trouble if the firm has to go to court later. If your firm was never registered, this step does not apply, though the change still has to be handled everywhere else.

3. Public notice of retirement

This is the step retiring partners regret skipping. Under the Partnership Act, a retiring partner remains liable to outsiders for the firm’s acts done after retirement until public notice of the retirement is given. For a registered firm, public notice means notice to the Registrar of Firms plus publication in the Official Gazette and in at least one vernacular newspaper circulating where the firm does business. Tell your main suppliers, customers and lenders in writing as well.

4. Bank, loans and guarantees

Give the bank the supplementary deed and a fresh account operation mandate, with the incoming partner’s KYC. Remove the retiring partner as an authorised signatory. If the firm has a loan or overdraft, the retiring partner’s personal guarantee does not end just because they left the firm: the bank has to release it, and it may want a guarantee from the new partner instead. Settle this before the retiring partner is paid out.

5. Udyam, licences and other registrations

Update the Udyam registration (see our guide to updating the Udyam certificate), especially if the retiring partner’s mobile or email is on it, since every OTP goes there. Do the same for the shop licence, trade licences, IEC, GeM or vendor registrations with your buyers, and any digital signature certificates held by the retiring partner.

6. Income tax

The firm keeps its PAN. For income tax, a reconstitution where at least one old partner continues is a change in constitution of the same firm, and the firm files one return for the year, showing the partners and their profit shares before and after the change. Two things to plan with your CA before signing:

• Payouts to a retiring partner can be taxed in the firm’s hands. Since the Finance Act, 2021, when a partner receives money or assets from the firm on reconstitution in excess of their capital account balance, the excess can be taxed as capital gains of the firm (Section 45(4) of the 1961 Act, carried into Section 67(10) of the Income-tax Act, 2025). Handing over a capital asset or stock can trigger a separate charge (Section 9B, now Section 8 of the 2025 Act). Revaluing assets just before a retirement doesn’t avoid this, because revaluation is ignored in working out the capital balance.
• Remuneration and interest clauses. The firm can deduct partners’ remuneration and interest on capital only if the deed authorises them, within the prescribed limits. Restate these in the supplementary deed so they clearly apply from the effective date.

7. Books of account

Close the partners’ capital and current accounts on the effective date, pass the entries for goodwill and revaluation if agreed, transfer the retiring partner’s balance to a loan account until it is paid, and open the new partner’s capital account. Doing this in the books on the right date is what makes the income tax return and the profit split defensible later.

Converting a proprietorship into a partnership

This is not done with a supplementary deed, because there is no partnership deed to supplement. Bringing a partner into a proprietorship creates a new firm: a fresh partnership deed, a new PAN for the firm, a new GST registration, a new Udyam registration and a new bank account. The proprietor’s GST registration is then cancelled, and stock and input tax credit can be transferred to the firm under GST’s rules for transfer of business. Our guide to setting up a proprietorship explains why the structure change carries this paperwork.

Frequently asked questions

Is a supplementary partnership deed mandatory?
There’s no separate law requiring it, but without one you can’t prove the change. GST, the bank, the Registrar of Firms and the income tax department will each ask for it, and the income tax deductions for remuneration and interest depend on what the deed says.

Does the supplementary deed need to be notarised or registered?
The Partnership Act does not require a deed to be notarised or registered with the sub-registrar. Many firms notarise it anyway. Registration with the sub-registrar becomes necessary where the deed transfers immovable property. Don’t confuse this with registering the firm with the Registrar of Firms, which is a separate step.

Does the firm get a new PAN when partners change?
No, provided at least one existing partner continues and the firm is reconstituted rather than dissolved. A new PAN is needed only when the old firm is dissolved and a new one formed.

Does the GSTIN change when a partner joins or retires?
No. You file a core-field amendment in REG-14 within 15 days, and the GSTIN stays the same.

Can a retiring partner sign the supplementary deed?
Yes, and they should. Their signature is the best evidence that they agreed to retire and to the settlement of their dues.

What if one partner refuses to sign?
A new partner can be admitted only with the consent of all existing partners, unless the deed provides otherwise. Retirement without everyone’s consent is possible only as the deed allows, or, in a partnership at will, by written notice to all the other partners. Disputes like this need a lawyer.

Sources: Indian Partnership Act, 1932, Sections 31, 32, 42, 60 to 63 and 72; Central Goods and Services Tax Act, 2017, Section 28, with CGST Rules, 2017, Rule 19; Income-tax Act, 1961, Sections 9B, 45(4) and 187, and the corresponding Sections 8 and 67(10) of the Income-tax Act, 2025; Maharashtra Stamp Act, 1958, Article 47; Karnataka Stamp Act, 1957; Tamil Nadu stamp schedule as amended from 3 May 2024; Delhi Registration of Partnership Firms Rules, Form V. Updated November 2026.

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