Partnership Agreement Template
A partnership agreement is a legal contract that is signed between the investors who contributed to start a company and who own ownership rights in the company. This agreement on one hand, legalize the partnership of each partner in the company putting them responsible for the liabilities of the company where on the other hand, this agreement also defines the investment of each partner, their percentage of profit in the company, their responsibilities and role in the management, duration of the partnership in case of Limited Partnership agreement and the key decision maker in the company who can be a general partner or a CEO hired on salary for the decision making.
5 Key Clauses to Include in the Partnership Agreement:
- Decision Making Power:
The most important clause to include in the partnership agreement is to decide who will make all the key decisions in the company and if the others will have a saying in that or if they can’t disagree with the general decision maker.
- Salary of Each Partner:
This will specify how much each partner will get from the business in form of both salary and profit. If partners are also asked to perform key duties in the company, this clause will help to specify their salaries and additional benefits.
- Capital Contribution:
This clause in the partnership agreement explains the contribution or investment of each partner in the business. When the investment of each partner is explained in this clause, this will also explain who is the capital contributor with biggest investment and if he is the general partner or not.
- Death of a partner:
After the partnership agreement is signed, if a partner dies or disables, this clause will help the other partners and the family members of the deceased partner to get the benefits or dispute legal issues.
- Dissolution of the Partnership:
It is not for sure that when the partnership agreement will be dissolved resulting the business to end but it will happen even if it happens 50 years from now and this clause will help the partners to dispute the issues and legal situations at the time of dissolution of the partnership and ending of the business.
Recommended Elements to include in the Partnership Agreement:
- Name and address of the company
- Purpose of the company (type of business the company will conduct)
- Names of each partner along with complete address bank account details
- Investment of each partner in the business along with profit percentage
- Duration for the partnership (important in case of joint venture)
- Authority of each partner along with specific duties and responsibilities of each partner
- Terms for adding new partners in the business
- Authority of each partner to conduct deals on behalf of the company
- How the disputes will be handled in future
- Terms to leave the company
- Dates when the agreement is signed and implemented
- Signature of the partners and witnesses
Here is preview of a Free Sample Partnership Agreement Template as Fill-able PDF,
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