When two or more parties decide to come together to start a business, they need to create a partnership agreement. An agreement is a written legal document that outlines the terms and conditions of the partnership. It covers the business structure, management, and the responsibilities of each partner. Moreover, the partnership agreement also covers the profit sharing, liabilities and obligations of the partners.
An effective partnership agreement provides clarity, avoiding any misunderstandings, and helps to build trust among the partners. It protects the interests of every party involved. In this article, we will provide an example of a partnership business agreement.
Partnership Agreement Example
We, the undersigned, hereby enter into a partnership agreement (the “Agreement”) on the _________________ day of ___________________20___, for the purpose of conducting the business of ____________________________________________ (the “Business”).
Name of Partners:
1. Name: _________________________________________
Address: _______________________________________
Email: _________________________________________
Phone: ________________________________________
2. Name: _________________________________________
Address: _______________________________________
Email: _________________________________________
Phone: ________________________________________
3. Name: _________________________________________
Address: _______________________________________
Email: _________________________________________
Phone: ________________________________________
Business Structure:
The partnership shall be operated as a general partnership. All partners have equal rights to control, manage and operate the Business. A majority vote shall be required to make decisions.
Management:
The management of the Business shall be under the control of all partners. The partners may mutually agree to assign specific tasks to each partner based on their expertise.
Capital and Profit Sharing:
All profits and losses of the Business shall be divided equally among the partners. The capital contribution of each partner shall be in proportion to their profit sharing ratio.
Liabilities:
Each partner is jointly and severally liable for all debts and obligations of the Business.
Dissolution:
The partnership can be dissolved by unanimous vote of all partners or by the withdrawal of any partner. In case of the death of any partner, the partnership shall be dissolved.
Confidentiality:
The partners shall keep all information about the Business and its clients, confidential during and after the term of this Agreement.
Arbitration:
Any dispute between the partners shall be resolved through arbitration by a neutral third party.
Amendments:
Any amendments to this agreement shall be in writing and signed by all partners.
Conclusion:
Creating a partnership agreement is an essential first step before starting a business. It helps create mutual understanding and trust between the partners. The above example outlines the main elements that should be included in a partnership agreement. However, it is essential to consult with a lawyer to ensure that the partnership agreement is compliant with the laws of your state and covers all requirements of the business.