Partnership agreement template is a template that define rights and responsibilities of partners in an agreement. A sample partnership agreement can help business to structure the relationships between business parties.
Partnership Agreement Overview
Choosing an appropriate business form is a important consideration for those who want to start up their own business. Choosing a form of organization usually comes down to choosing between a partnership and a corporation, the third form of business is proprietorship. A corporation is an entity (usually a business) having authority under law to act as a single person distinct from (separate from) the shareholders who own it and having rights to issue stock and exist indefinitely; or a group of persons established in accordance with legal rules into a legal or juristic person that has legal personality distinct from the natural persons who make it up, exists indefinitely apart from them, and has the legal powers that its constitution gives it. A partnership is an association of two or more persons or entities that conduct a business for profit as co-owners. The partners are taxed as individuals and are personally liable for torts and contractual obligations. Each partner is viewed as the other’s agent and, traditionally, is jointly and severally liable for the tortious acts of any one of the partners. A proprietorship is a business entity consisting of a single owner, also termed as sole proprietorship, which is a business owned and controlled by one person who is solely liable for its obligations.
A partnership is the simplest form of organization involving more than one person. It is formed merely by agreement of the partners, who share the right to manage and the right to participate in the profit. Profit participate may by allocated by agreement; in the absence of agreement each partner equally in profits. Each partner is also personally liable on partnership obligations; losses are shared by the partners, and if the losses exceed the accumulated profits, each partner must make a further contribution to the partnership on dissolution to cover the losses, including capital losses of other partners. In the absence of agreement, each partner shares equally in the losses. Each partner is also an agent of the partnership for purposes of its business and has a voice in management. In the absence of a specific agreement, all partners share equally in management decisions.
Partnership Agreement Template
There are free partnership agreement templates you can download for reference. Alternatively, you can use common software such as Word to create your own partnership agreement sample. In the process of designing a personalized partnership agreement, you need to consider the partnership agreement form, partnership agreement format and key elements for your template.
The first key part in partnership agreement template is background information. In the section, you may include: the name of the Firm shall be ___, the firm shall begin on the ___,the business of the Firm shall be carried on at the premises known as___ or places as a Majority of the Partners may from time to time determine.
The second key part in partnership agreement sample is capital and profit distribution. In the unit, you may include: The initial capital of the Firm shall be the total sum of ___, contributed by the Partners in the amounts or shares. Each of the Partners shall forthwith pay into the Firm bank account___ the sum to be contributed by him, If at any time the Partners decide to increase the capital of the Firm, the amounts of the increase shall be contributed in such proportions as they may agree and, in default of agreement, in the same proportions as they are entitled to in the capital of the Firm. etc.
The third key part in partnership agreement example is management and decision. In the section, you may define: __ shall be the Managing Partner of the Firm, for a period of __ years from the date of this agreement, and thereafter the Management Committee shall appoint a Managing Partner. Unless otherwise decided by the Management Committee, the Managing Partner shall not be entitled to any additional remuneration or share of profits by virtue of his being Managing Partner. The day-to-day business affairs of the partnership shall be directed by the Managing Partner.