Partnership is often called the most unstable ship that ever sailed. Without an agreement that sets out in detail what partners may and may not do, one partner can leave other partners liable for his actions. We provide carefully drawn partnership agreements to help your ship to avoid the reefs. We also include a dissolution agreement in case it fails. These agreements are suitable for any business.
A comprehensive partnership agreement suitable for a business in any industry and with any number of partners. Covering a large number of practical, commercial and administrative points and also provides additional terms relevant to how a modern day business operates. Use it not only to protect your legal rights but also to set out how you want your partnership to work.
Essential document to admit a new partner into any partnership.
Ideal for family businesses or groups of friends working together, this partnership agreement provides a good framework for setting out how the business will be run. It is slightly less formal than our standard partnership agreement, but still includes the provisions small businesses need.
A simple partnership dissolution agreement, professionally drawn as a framework for the partners to dissolve their partnership. Covering practical, commercial and administrative points, it can be used for partnerships of any size and in any industry.
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A partnership agreement (also known as business partnership agreement and partnership contract) is a legal document used when two or more people enter into formal arrangements to manage and operate a partnership business with the aim make profits.
The partnership agreement sets out the key details that relate to operating the business partnership such as, amongst others, identifying the partners, initial capital contribution by partners, sharing profits and losses, each partner's share, decision making, further capital contribution, and dissolution of the partnership.
The purpose of the partnership agreement is to provide a business structure that regulates all aspects of operation of the business partnership and to provide a framework that regulates the relationship that exist between each individual partner.
A partnership agreement is all about the structure and management of a business. It does not matter what industry the partners work in. They could be professionals, like accountants or architects, they could be tradespeople like retailers or home extension experts, or they could operate a more unusual business in property or finance or international trade.
Furthermore, your business as partners could be a single specific project, such as a technology development project, and does not necessarily have to be commercial in nature.
Partnerships are quite distinct from companies in many areas, so the issues you need to cover in your agreement can be quite different to those that owners of a company might consider.
The problem is that, for the modern business, those default positions are unlikely to be what you want. In particular, you are likely neither to want equal ownership and liability with other partners, nor the default method for ending the partnership.
Unless your agreement states otherwise, all the partners have equal rights to take on contracts and equal responsibility to fulfil them. Profits and losses are also shared equally.
Commonly in partnerships, disagreements occur over contributions to the business and how profit and assets should be divided. In the real world, partners do not contribute equally.
You should use a comprehensive written agreement to override these default positions. Your business partnership agreement should set out how skills, initial funding, different working hours and “assets” such as customer contact lists are valued, because different people place very different values on them. If you work for six days a week but your partner only works for two, you will want to make sure you are rewarded for your additional effort.
Liability is also joint and equal. Without a partnership agreement stating otherwise, a partner could make a contract in the course of partnership business that carries high risk. If that contract goes wrong, he or she, and all the other partners are liable for partnership debts equally. A partner in a business that isn’t regulated by a partnership agreement can find himself or herself in a position of personal bankruptcy as a result of a bad decision made by someone else, and about which the partner wasn’t made aware.
The other default position of the Partnership Act to avoid relates the ending of the partnership – the dissolution. The Act provides only one way to handle a partnership split or break. That is to put everything under the hammer at auction, leaving the partners to buy or not, as they choose. In our regulated society and business environment, that outdated provision can cause huge problems. The only way to avoid it is to have a modern partnership agreement which provides a proper exit route.
However, there is far more to a Net Lawman partnership agreement than just overriding these defaults. Each of these partnership agreement templates provides a large framework for a modern partnership with many options, and extensive notes that guide you carefully through, paragraph by paragraph.
Other partnership agreements on the Internet, particularly ‘short’ versions, might cover the basics to form a partnership, but they aren’t likely to protect your interest in your new business sufficiently. Far more issues are considered in our documents than in any other partnership agreement template we have seen.
For example, the Net Lawman partnership agreement templates provide a set of easy to edit paragraphs covering intellectual property protection in depth. Most businesses have valuable IP, whether know-how or designs, but few partnership agreement templates address intellectual property, whether recognizing who brings it into partnership, or who has the right to use it during and once the partnership ends. We help you to identify and protect ownership of valuable intellectual property and other assets that belong to just one partner.
The short answer is that a business partnership agreement should cover everything of importance.
The point of having a partnership agreement is that you will have a detailed document that governs every aspect of the management and operation of the business partnership. So for a partnership agreement to do its job, it must be a comprehensive document.
Some important provisions a modern business partnership needs in their business partnership agreement include:
The importance of having a written partnership agreement is not diminished if a husband or wife or family members are running a business together.
While, a family business partnership agreement does not have to be as formal as a general partnership agreement where the all the partners not personally known to you. You still need to have a partnership agreement.
Informal partnerships can present some serious concerns for family businesses. For example, in the absence of a partnership agreement, the default rule regarding ownership will apply that assume that the business is owned equally by all the partners. This may not be the arrangement you would prefer to have. While equal partnership in a family business may see natural, it can get very tough to resolve a dispute if all the partners are adamant on their position.
The purpose of a partnership agreement is to set out the arrangements between the parties about how they will work, in much the same way as a shareholders’ agreement does for a company. So these templates have a wide range of uses.
You need a partnership agreement to record all the points agreed about what exactly is the partnership business; how you will manage it; who may take out what money, and much more.
These are professionally drawn; comprehensive documents designed to protect and help you. As well as giving you a legal structure, they contain extensive commercial and practical provisions that will help you manage your business and inter-partner relationships.
Despite the completeness and thoroughness of these documents, editing is easy. They are written in plain English, without legal jargon or complicated paragraph referencing so that you can simply and easily delete what you don't need.
Just a few of the provisions covered include: