Is rupees 20 Stamp paper agreement valid to do.

533 votes

Under Indian law, a 50-50 profit-and-loss sharing arrangement is permissible if it satisfies the requirements of a valid contract under the Indian Contract Act, 1872—offer, acceptance, lawful consideration, free consent, and lawful object. However, if this arrangement involves regulated activities like portfolio management, compliance with SEBI rules is vital. Stamp duty depends on state laws and the agreement’s value. While lower-value agreements may be executed on INR 20 or INR 50 stamp paper, substantial deals could require higher stamp duty. If insufficiently stamped, it may be inadmissible until deficiency and penalties are paid. To ensure enforceability, the agreement should define how profits and losses are calculated, payment frequency, and timelines. Breach of contract remedies are available: if one party fails to share profits or cover losses, the aggrieved party can file suit. Key clauses should address dispute resolution, termination, and jurisdiction. Notarization or witness signatures boost credibility. If the arrangement effectively constitutes portfolio management or advisory services, follow relevant SEBI guidelines. The more specific and clear the contract, the less room for conflict. A properly drafted and stamped agreement ensures enforceability and protects both parties’ interests. Consulting a legal professional can confirm stamp duty compliance and safeguard your rights.

Advocate Dheeraj Singh LawRato

771 votes

Hi sir, as per your details agreement is made between two parties with the term and conditions decided by both the parties mutually. Agreement paper can be made on stamp paper of Rs 100 in which two witnesses are also required. For further proceedings please have a call or a chat. Thanks

Advocate Divya Kiran LawRato