A partnership agreement template is a legal document that states the roles and responsibilities of partners in forming a partnership. A well drafted sample partnership agreement can help business partners to form a business entity.
Partnership Agreement Format
Partnership agreement needs to consider the types and format of partnership. There are various forms of business partnerships: general partnership, limited partnerships, limited liability partnerships and limited liability companies. A general partnership is a partnership which includes only general partners. Under this structure, all partners participate in the day-to-day operations of the partnership and all partners bear personal responsibility for debts and liabilities of the partnership. Limited partnership has both general partners and limited partners and Limited partners do not participate in day-to-day operations of the partnership and they bear no liability for debts or actions of the partnership. Limited Liability Partnerships (LLPs) are formed with general partners, but all general partners are shielded from liability for the acts of other partners or employees.
Partnership agreement needs to take the value, goals, experience of your partner. If a person would like to set up a business partnership, they need to find a partner that has common value, entrepreneurial spirit, and vision. You will need to be able to communicate effectively with your partner to make decisions, set goals, and drive the business forward.
Partnership Agreement Template
There are free agreement template you can download for use, however, you may design your own customized sample agreement based on your own format and style.
The first key part in partnership agreement template is the details of partners. This partnership agreement is made on ___ between _____ and _____. The parties hereby form a partnership under the name of _____ to conduct a ______ (state the scope of business). The principal office of the business shall be in ______(state the location of business premise). The partnership shall begin on ________ and shall continue until terminated as herein provided.
The second key part in partnership agreement sample is capital, profits and losses. In the section, you need to state the capital source, the shares of profit and losses etc. For example, A separate capital account shall be maintained for each partner. Neither partner shall withdraw any part of his capital account. Upon the demand of either partner, the capital accounts of the partners shall be maintained at all times in the proportions in which the partners share in the profits and losses of the partnership. The net profits of the partnership shall be divided equally between the partners and the net losses shall be borne equally by them. A separate income account shall be maintained for each partner.
The last key part in partnership agreement example is the management roles and responsibilities. In the section, you need to give detail roles for managing daily operation of business. For example, The partners shall have equal rights in the management of the partnership business, and each partner shall devote his entire time to the conduct of the business. Without the consent of the other partner, neither partner shall borrow or lend money, or make, deliver, or accept any commercial paper, or execute any mortgage, security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract to sell any property for or of the partnership other than the type of property bought and sold in the regular course of its business.