Summary A Partnership Agreement can be used for the mutual protection of Partners in a Partnership established as a trading concern. A written agreement confirms the establishment of the business entity, and sets out the Partners’ respective rights and obligations in relation to each other, including financial considerations.
Why do I need a Partnership Agreement? If your business operates as a Partnership, a written agreement may be considered between the Partners. A Partnership Agreement, amongst other things, is used to set out the procedure for the payment of Partner contributions, decision-making, profit-sharing, a Partner breach, policies regarding loans, and other issues relevant in a Partnership.
What does the agreement say? The standard agreement consists of: Parties, Interpretation; Formation of Partnership, Duration, Capital Contributions, Loan Accounts, Financial Information, Books of Account, Management, Matters requiring unanimous agreement, Voting and Resolution, Profits and Losses, Confidentiality, Dissolution of the Partnership, Breach, Disputes, Whole Agreement, Addresses and Notices, Costs.
What does the Agreement look like? The sample agreement can be printed onto nine pages.
What do you need to do to use the agreement?
- Read the standard Partnership document to ensure that it suits your requirements. Complete the requisite sections, making changes as required. Whilst the document template provides for four Partners’ details, the Partnership may have either more or less Partners, in which event the details section can be modified accordingly.
- Ensure all the parties sign the contract with each party getting a copy of the final, signed agreement.
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