Partnership Agreement Template

A partnership agreement template is an undertaking between two or more different business partners. This agreement includes rights, authorities, benefits and loss of each partner. Each partner is equally answerable for the debts and tasks of the organization and the activity of other partners. A partnership agreement can also be called a general partnership agreement or partnership contract or business partnership agreement. Any two or more individuals, including friends, family or colleagues can form a business agreement for running a profit business together. It generally outlines the rules, regulations and directions for partners to act in accordance with, to avoid any disagreement or conflict in future processes.

Elements of Partnership Agreement

• Names of the partners: The first thing that all agreements require is to agree on the name of their partnership. Individuals can use their own last name or come up with any fictional business name, such as Metro car repairs. If you are using a fictional name for your business, make sure that the name isn’t already used by someone else.

• Partner’s contribution: It is a very crucial step for business partners to work out and state how much each partner is contributing to the business, in terms of capital, property, and assistance, before starting a business. It is also important to record what percentage each partner will get at the end of the project or year.

• Possession: Every business partnership agreement must mention the division of the ownership of the organization. Agreement should also cover different situations that could impact the division of the possession of each partner.

• Partner’s duties: It is necessary to define the rules for management in detail. It is a wise thing to work on some recommendations in advance. Some examples are, who will deal with the customers, manage employees, and keep track of supplies. Make sure that every management need is covered.

• Admission of new partner: If the business is expanding and new partners need arises. So, agreeing on adding a new partner will make the procedure easier.

• Withdrawal of a partner: It is important to keep in mind that anytime any partner might want to withdraw the partnership agreement. There should be a logical scheme to deal with this kind of situation in your agreement.

• Resolving conflicts: Eventually, there will be a time when partners have clashes with each other. It might be helpful to state a plan for settling conflicts or disputes in partnership agreement to overcome any costly action. There are two options for mediation or arbitration. It is a better way to solve disputes instead of heading towards court.

Importance of Partnership Agreement

It is important to make an agreement before setting up a new business. It is necessary to discuss different and difficult scenarios or subjects with partners and plan how to resolve disputes or disagreements. One of the main benefits of having a partnership agreement is to address conflict before time, and that every member is aware of their responsibilities and rights, contributions in term of capital, resources or services, profit or loss.

Templates for Partnership Agreement