Partnership agreement
/What is a Partnership Agreement?
A partnership agreement is a written or oral agreement that governs decision making within a partnership, as well as how key decisions are handled. This agreement is essential for the orderly running of any enterprise organized as a partnership.
Contents of a Partnership Agreement
A partnership agreement should include information or provide instructions about the following topics:
The names of the partners
The amounts contributed by each partner
The rights and responsibilities of each partner
Whether partners are designated as general partners or limited partners
The proportions of partnership gains and losses to be apportioned to each partner
Procedures related to the withdrawal of funds from the partnership, as well as any limitations on these withdrawals
How key decisions are to be resolved
Provisions regarding how to add partners and terminate partners
What happens to partnership interests if a partner dies
What steps to follow to dissolve the partnership
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If a partnership agreement does not include the preceding topics, then there is a risk of acrimony among the partners when a decision must be made, and there is no formal guidance regarding how to proceed.
Terms Similar to Partnership Agreement
A partnership agreement is also known as articles of partnership.