A partnership agreement is a legally binding document that outlines the terms and conditions of a partnership. While the specific contents may vary depending on the nature of the partnership and applicable laws, here are some key elements commonly included in a partnership agreement:
Partnership Details: Clearly state the name, purpose, and duration of the partnership, as well as the names and addresses of the partners.
Contributions: Specify the capital contributions made by each partner, whether in cash, assets, or services. Outline the process for additional contributions if required.
Profit and Loss Distribution: Describe how profits and losses will be allocated among the partners. This can be based on the partners’ capital contributions, agreed-upon percentages, or other criteria.
Decision-Making and Management: Define how decisions will be made within the partnership, including voting rights, decision-making processes, and the role of managing partners if applicable.
Partnership Authority: Determine the authority of each partner in conducting partnership business, including the ability to enter contracts, borrow money, and make decisions on behalf of the partnership.
Roles and Responsibilities: Clearly outline the roles and responsibilities of each partner, including specific duties, obligations, and areas of expertise.
Partnership Withdrawal or Dissolution: Establish procedures for a partner’s withdrawal from the partnership or the dissolution of the partnership, including how assets will be distributed and liabilities settled.
Dispute Resolution: Specify methods for resolving disputes among partners, such as mediation or arbitration, and identify the jurisdiction or governing law applicable to the partnership.
Non-Compete and Confidentiality: Include provisions to protect the partnership’s interests, such as non-compete clauses, confidentiality agreements, and restrictions on the use and disclosure of sensitive information.
Amendments and Termination: Define the process for amending the partnership agreement and outline circumstances that may lead to the termination of the partnership.