Partnership Agreement Template

A partnership agreement is a contract between two parties that come together to create a new business partnership or formalize an existing business partnership. It is a contract or agreement that contains some important clauses related to the capital contribution, management roles, debt and profit allocation, restrictions on the partners, dissolution, termination, etc. It helps both the partners to structure the business in a way that would be most profitable to them and their business.

The main purpose of this agreement is to put the terms and conditions of the partnership in writing so that both the partners don't spell out each other's rights and responsibilities. In short, the agreement protects your business rights and in conditions where some conflicts or minor misunderstandings arise you can handle them well without being at loss.

Well, this was just a brief insight about what is partnership agreement. If you are entering one such partnership deal and want to prepare your business partnership agreement but having a tough time deciding what clauses to include and what not to, then here is a general template for you.

Template for Partnership Agreement

Business Partnership Agreement Template This Partnership Agreement is made on (Date) between: Name: ____________________ Address: ____________________ City/State/Zip: ____________________ Name: ____________________ Address: ____________________ City/State/Zip: _________________ Name of Business: The parties hereby form a partnership under the name of (Business Name) for the purpose (Business purpose/agenda or Business Product/Service). The main office of the business is at (Address). Role of Partners: Each partner of this business would be having equal and fair rights to manage and control the partnership and its business. The partners have to render their full-time support, services and efforts on behalf of the partnership. No partner can adhere the partnership by act or contract to any liability with the prior written acceptance of each partner in this partnership. Capital Contribution: The capital contribution of each partner towards this partnership would be governed by maintaining a separate capital account for each partner. No partner can withdraw any part of the capital account without the consent of each partner. The capital account of each partner would be maintained in accordance to the partners share in the profits and losses of the partnership and its business. Profits and Losses: The net profits and losses of the partnership shall be divided fairly between the partners in accordance to the mutually agreeable schedule and by the end of each calendar year. Salaries and Interests: No partner would be receiving any salary or interest for rendering services or capital contribution to the partnership. Termination: The term of partnership shall begin on (Date) and shall continue until terminated. If the partnership gets terminated by an unanimous vote, the net assets and capital of the partnership would be used to remunerate all creditors and the remaining capital would be distributed to the partners according to their contributed share. Disputes: This Partnership Agreement would be governed by the laws of the State of (Name of the State). Any conflicts or disputes arising between the business partners would be resolved by arbitration corresponding to the rules of the (Name of the Arbitration Association) and the judgment upon the award provided may be entered in any court having jurisdiction thereof. Withdrawal/Death of Partner: Upon the withdrawal/death of a partner, the remaining partner have the right to either purchase the interest of the decedent partner or terminate and neutralize the partnership business. If the surviving partner decides to purchase the decedent's interest, he/she has to provide a formal notice in writing of such decision within the three months after the demise of the decedent partner to either the executor or administrator of the decedent, or one of the known legal heirs of the decedent. A withdrawing partner shall be obligated to give a two-month prior written notice of his/her attention to withdraw or retire. The remaining partners have to pay the withdrawing partner or the legal representative of the decedent partner, the value to his/her interest in the partnership, sum of his/her capital account, unpaid loans, proportionate share of accumulated net profits in his/her capital account, and the interest in any prior accorded appreciation in the value of the partnership property over its overall net value. Non-Compete Agreement: A partner who withdraws from the partnership cannot directly or indirectly join a business which is or could be a competitive to the existing business for a time duration of (Time). In witness whereof, the partners have executed this Partnership Agreement on (Date). ____________________ Partner Signature ____________________ Partner Signature

To sum up, we can say that partnership agreement is an absolute must for a person who is starting to do a business in partnership. This contract or document not only outlines the basic details related to partnership but also protects your rights in cases of an argument or dissolution.