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If you’re starting a business partnership, it’s important to have a partnership agreement that outlines your rights and responsibilities within the arrangement.
A partnership agreement template can help you and your partner create a solid legal framework for your business.
A partnership agreement is a legal document that sets out the terms and conditions for a business partnership. It’s up to you and your business partner to define the scope of the agreement.
But as a guide, you can find the following in our business partnership agreement example:
This is an important part of any legal document as it defines key terms to make sure everyone is on the same page when reading the document.
This states the date the partnership commenced and the name of the partnership.
This section of the business partnership agreement deals with the money used within the partnership, covering the likes of initial cost, interest rates, and who will own what percentage.
This lays out a framework on how you'll make decisions within the partnership, including changes (for example, to business locations or names).
This section covers when and how you'll keep financial records, as well as the banking arrangements within the partnership agreement.
This is a very brief section on how you'll divide profits and losses between the partners.
This section covers when and how partners can withdraw money from funds belonging to the partnership.
This section covers all of the duties that both partners are legally obliged to carry out.
These are restrictions on both you and your partner, covering activities you can’t engage in without the written consent of the other. These might include becoming a guarantor or lending money that belongs to the partnership.
You and your partner might want to include certain conditions that trigger the dissolution of the partnership. You can use this section to specify them.
This section simply states that the benefit of the partnership agreement cannot be assigned by either partner.
This comes at the end of the document and sets out the names of the partners, their contributions and share of the profit and loss.
You can add new sections, or remove any that aren't applicable to your partnership. It's always best to seek out legal advice before doing so.
Most partnership agreement templates will include setions that you'll need to fill in with the correct information, such as both your names.
Once you've made those changes and any other amendments, you'll need to print and sign the document. Your partner and two witnesses will also need to sign.
Do you have any unanswered questions about creating a partnership agreement? Let us know in the comments below.
Conor Shilling is a Copywriter at Simply Business with over two years’ experience in the insurance industry. A trained journalist, Conor has worked as a professional writer for 10 years. His previous experience includes writing for several leading online property trade publications. Conor specialises in the buy-to-let market, landlords, and small business finance.
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