Partnership agreement is a contract between you and your partners. The partnership agreement defines the many aspects of the business operations and shares of ownerships. A well designed partnership agreement template will help you get started when you are planning to set up a partnership business.
Partnership Agreement Overview
A partnership is a relationship between two or more persons who join together to establish a business. Each partner will contributes money, property, labor to the partnership and, in return, expects to share in the profits or losses of the business. A partnership is usually based on a partnership agreement, although the agreement need not be a formal document.
A partnership agreement generally will define your relationship with your partners in a way that suits your business. You and your partners can establish the shares of profits (or losses) each partner will take, the obligations and rights of each partner, what will happen to the business if a partner leaves.
Partnership Agreement Template
Your business may have unique considerations and do not comply with the standard Partnership agreement, in this case, you can create your own partnership agreement template to suit your needs, it is important to know what should be included in your agreement template. There are essentially three key areas you need to include in your template.
The first key area in partnership agreement template is information about the business entities. In this section, you need to give details about the business name, the commencement and duration, place of business and the registered capital etc.
The second key area for a partnership agreement template is about roles and responsibilities. In this section, you need to state clearly the roles and responsibilities of each partner. The agreement should give clear instructions on the management and decisions process, profit and losses allocation and the managing partner. The role of managing partner and managing committees also need to be defined.
The last key area for a partnership agreement template is about restriction on activities. For example, the partners may not solicit any business similar to the partnership business from any person who has been a client or customer of the partnership or induce any person to leave the employment of the partnership or any partner to retire from the partnership or carry on business similar to or in competition with the partnership business.