Partnership Contract Template

Collaborate with Confidence: Draft tailored partnership agreements to outline roles, protect interests, and build a solid foundation for your shared business success.

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Partnership Agreement

Jim Clark Co
Partnership Agreement
Jim Clark Co

Agreement

This Partnership Agreement ("Agreement") is made and entered into on [Date], by and between the following partners:
Participants
Partner 1

John Doe

123 Main St

New York, Ny 10012

[email protected]

(212) 555-1212

Partner 2

John Doe

123 Main St

New York, Ny 10012

[email protected]

(212) 555-1212
Terms
1. Name of the Partnership: The name of the partnership shall be [Name of Partnership] ("Partnership").

2. Purpose of the Partnership: The purpose of the Partnership is to [describe the business purpose and activities of the partnership].

3. Policies and Procedures for Adding or Removing Partners:

Adding Partners: New partners may be added to the Partnership upon the unanimous written consent of all existing partners.
Removing Partners: A partner may be removed from the Partnership by unanimous agreement of the other partners, following a vote in accordance with the decision-making procedures outlined in this Agreement.

4. Duties and Responsibilities of the Partners: Each partner shall have the following duties and responsibilities:
[Describe the specific duties and responsibilities of each partner]

Decision-Making and Voting Procedures: Decisions regarding the Partnership shall be made as follows:

Major decisions (e.g., financial expenditures, strategic direction) require a [specify percentage, e.g., unanimous or majority] vote.
Day-to-day operational decisions can be made by [specify, e.g., individual partners, designated managing partner].

5. Allocation and Distribution of Profits and Losses:

Profits and losses shall be allocated among the partners according to their ownership percentages, as specified in this Agreement.
Distributions of profits shall be made [specify frequency, e.g., quarterly, annually], after reserving sufficient funds for operating expenses and future growth.

6. Capital Contributions and Ownership Percentages:

Each partner agrees to contribute the following capital to the Partnership:

Partner 1: [Amount]
Partner 2: [Amount]

Ownership percentages shall be determined based on the capital contributions of each partner:

Partner 1: [Percentage]
Partner 2: [Percentage]

7. Acceptance of Liabilities: Each partner shall be jointly and severally liable for the debts and obligations of the Partnership.

8. Taxation:

The Partnership shall be taxed as [specify, e.g., a partnership, an LLC, etc.].
[Specify Partner or Partners] shall be responsible for the preparation of tax forms and compliance with tax laws, including the payment of any taxes owed by the Partnership.

9. Procedure for Addressing the Death or Disability of a Partner: In the event of the death or disability of a partner, the remaining partners may choose to:

Continue the Partnership with the estate or legal representative of the deceased or disabled partner.
Buy out the interest of the deceased or disabled partner based on a valuation method agreed upon by the partners.

10. Dissolution of the Partnership:

The Partnership may be dissolved for the following reasons:

Mutual agreement of all partners.
Death or disability of a partner, if the remaining partners choose not to continue the Partnership.
Bankruptcy or insolvency of the Partnership.
Any other reason as determined by a [specify percentage, e.g., unanimous or majority] vote of the partners.

Upon dissolution, the Partnership’s assets shall be liquidated, and the proceeds shall be distributed as follows:

Payment of Partnership debts and liabilities.
Return of capital contributions to partners.
Distribution of any remaining assets according to ownership percentages.

11. Dispute Resolution: Any disputes arising under this Agreement shall be resolved through the following procedures:

Negotiation: The partners will first attempt to resolve the dispute through informal negotiation.
Mediation: If the dispute cannot be resolved through negotiation, the partners agree to attempt to resolve the dispute through mediation.
Arbitration: If the dispute is not resolved through mediation, it will be submitted to binding arbitration under the rules of the [specify arbitration association, e.g., American Arbitration Association].
Legal Remedies: The partners agree that the arbitrator's decision will be final and binding and may be entered as a judgment in any court of competent jurisdiction.

12. Amendments: This Agreement may be amended only by a written document signed by all partners. Any changes must be discussed and agreed upon by all partners before they take effect.

15. Signatures: By signing below, the partners agree to the terms and conditions outlined in this Partnership Agreement.

This Agreement constitutes the entire agreement between the partners and supersedes all prior negotiations, representations, or agreements, whether written or oral. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Signatures
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John Doe

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John Doe

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A partnership contract agreement is like a prenup for a business. It's a legal document that spells out everything from each partner's role and responsibilities to how profits (and any losses) will be split. By keeping things clear and fair, it avoids any future drama and helps a business run like a well-oiled machine.

Who Needs a Partnership Agreement?

A partnership agreement isn't just for fancy law firms. It's a must-have for any business with two or more owners, from tech startups to a family bakery. This legal document keeps everyone on the same page regarding responsibilities, profits, and how to avoid future disagreements. Basically, it sets the stage for a dream team, not a business nightmare.

Why Do You Need a Partnership Agreement?

No More Guessing Games: A partnership contract agreement provides a clear outline of each partner's role, keeps everyone on the same page, and avoids misunderstandings down the road.

Deal With Disagreements: The partnership agreement provides a roadmap for resolving disputes and making decisions, so partners can stay focused on growing their businesses.

Legal Protection: A partnership contract agreement safeguards interests and sets up a legal framework to keep things running smoothly.

Financial Management: The contract spells out how profits, losses, and expenses will be handled. This ensures that there is clear information about where the money is going and shows fairness for everyone involved.

Types of Partnership Agreements

There's no one-size-fits-all partnership agreement. Here are the main options to consider:

The General Partnership: Everyone shares the workload, the profits, and the responsibility for any debts. Think of it as the ultimate team effort, where everyone has a stake in the game.
Limited Partnership: This option includes both general partners, who manage the business, but also brings in limited partners, who invest money but don't get involved in day-to-day operations. They have limited liability, so their personal assets are protected.
Limited Liability for All: This spreads the workload and profits, but everyone gets the perk of limited liability. Personal stuff is safe from business debts, even if things go south.

Not sure which type is right for you? An LLC can also be a good option, offering flexibility and limited liability to its members. Consult a lawyer to find the perfect fit!

What Should Be Included in a Partnership Agreement?

A partnership agreement is the ultimate team playbook. With clear roles and goals, it’s unstoppable! Here are the key things to include:

Capital Contributions: Spell out how much each partner contributes (funding) and how profits and losses are shared (think slices of pie!). Don't forget to choose how taxes will be handled too.
Compensation: This section spells out how everyone gets compensated for their hard work and contributions. It's not just about profits—think salaries or bonuses too!
Profit Distribution: Profits are great, but what about losses? This section defines how profits and losses will be divided among the partners. Fairness is key!
Tax Election: Partnerships don't pay taxes themselves, but the partners do! This section clarifies how the business will handle taxes as a team.
Management Responsibilities: In managing the business, each partner has their own special skills. This part explains what each person's job and responsibilities are.
Voting Rights: Establish how voting works and how disagreements will be tackled.
Partnership Withdrawal: Lay out the ground rules for partners leaving the business, including how to buy out someone's share if needed.
Partnership Buyout: Life changes, and so can partnerships! This section outlines how to buy out a partner's share if they decide to move on.
Restrictions on Transfer: This clause specifies whether partners can freely sell their shares or if there are any restrictions (like offering the buy-out option to other partners first).
Arbitration: Disagreements happen. This section allows for the use of arbitration (like a neutral referee) to resolve issues instead of a lengthy court battle.
Governing Law: Every state has its own business laws. This part highlights which laws of the state are relevant to the partnership.
Rules for Dissolution: If things don't work out, this section provides a clear roadmap for dissolving the partnership and dividing up assets fairly.
Place of Business: This one's simple – list the main business location.
Partnership Address: Include the partnership's official mailing address for any legal documents.
Start Date: Mark the calendar! This section is for stating the official start date of the partnership.
Business Name and Purpose: Clearly state the business name and its primary purpose. What problem is the business solving, or what product is it bringing to the world?

A well-written partnership agreement is like a GPS for the business journey. It keeps everyone on the same page, protects everyone's interests, and sets the company up to achieve shared goals!

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