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Partnership agreement template for small businesses

1-minute read

Business partners looking over a partnership agreement
Conor Shilling

Conor Shilling

27 October 2023

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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.

What is a partnership agreement?

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:

1. Definition of terms in the partnership agreement

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.

2. Details of the partnership

This states the date the partnership commenced and the name of the partnership.

3. Capital within the partnership agreement

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.

4. Management in the partnership

This lays out a framework on how you'll make decisions within the partnership, including changes (for example, to business locations or names).

5. Accounting records, annual accounts and banking

This section covers when and how you'll keep financial records, as well as the banking arrangements within the partnership agreement.

6. Profits and losses

This is a very brief section on how you'll divide profits and losses between the partners.

7. Drawings

This section covers when and how partners can withdraw money from funds belonging to the partnership.

8. Partners’ duties and responsibilities

This section covers all of the duties that both partners are legally obliged to carry out.

9. Restrictions within the partnership agreement

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.

10. Dissolution of the partnership agreement

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.

11. No assignment

This section simply states that the benefit of the partnership agreement cannot be assigned by either partner.

12. Schedule

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.

Using a partnership agreement template

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.

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Conor Shilling

Written by

Conor Shilling

Conor Shilling is a professional writer with over 10 years’ experience across the property, small business, and insurance sectors. A trained journalist, Conor’s previous experience includes writing for several leading online property trade publications. Conor has worked at Simply Business as a Copywriter for three years, specialising in the buy-to-let market, landlords, and small business finance.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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