Definition of Fixed-Term Partnership
A fixed-term partnership is created with a clear time frame agreed by the partners at the time of formation.

• Duration is mentioned explicitly in the partnership deed
  
• Can be for 1 year, 5 years, 20 years, or even 50 years—no legal limit
  
• The firm dissolves automatically when the term ends, unless extended
  
• Can also be converted into a partnership at will after expiry
  
• Useful for project-based or time-bound business arrangements
  

Flexibility in Duration by Agreement
The law allows partners full flexibility to decide how long the firm will operate.

• The period can be short-term or long-term, as mutually agreed
  
• No upper ceiling or restriction under the Partnership Act
  
• Long durations are common in real estate, construction, or family businesses
  
• The deed can include clauses for extension, renewal, or early termination
  
• Any change in duration requires written consent and amendment of the deed
  

Automatic Conversion After Term Expiry
If partners continue business after the fixed term without a new agreement, the firm becomes a partnership at will by default.

• Business continuation implies mutual consent to continue
  
• No need to re-register, but advisable to amend the deed
  
• All rights and liabilities continue as per the original agreement
  
• Any partner may then dissolve the firm by giving notice
  
• Useful for avoiding business disruption after the fixed term ends
  

Dissolution Process at the End of Term
If the partners choose not to continue, the firm is automatically dissolved upon expiry of the fixed period.

• Dissolution terms should be defined in the deed
  
• Assets are liquidated, liabilities paid, and capital distributed
  
• Partners may issue a public notice to limit post-dissolution liability
  
• Final accounts and tax filings must reflect closure
  
• May be followed by starting a new partnership with new terms
  

Importance of Clear Drafting in the Deed
The fixed term and exit conditions must be clearly documented to avoid confusion or disputes.

• State the exact start and end date of the partnership
  
• Include clauses for renewal or continuation after expiry
  
• Define the notice period and exit process
  
• Mention how profits and liabilities are handled during the final year
  

Keep the deed updated with mutual amendments if the term is extended