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Partnership Agreement

This Partnership Agreement (the “Agreement”) is made and entered into this [insert date here] (the “Effective Date”). The Partners in this Agreement are as follows:

  • [insert name of Partner 1]
  • [insert name of Partner 2]

 

The Partners of this Agreement agree to the following:

 

I. NAME

This Partnership will be known as [insert legal name] (the “Partnership”).

 

II. THE PARTNERSHIP

  • The Partners wish to become legal partners in business.
  • The terms and conditions of their Partnership will be outlined in this Agreement.
  • If the Agreement is executed, the Partnership will be in effect on [insert date].
  • The Partnership will only be terminated as outlined in this Agreement.
  • The Partnership’s primary place of business will be [insert primary business address].
  • The Partnership will be governed under the laws of the state of [insert state].
  • The Partnership’s primary purpose is [insert purpose of partnership].
  • If applicable, the Partners will obtain any necessary licenses and permits to do business, register its Doing Business As Name (“DBA”), and obtain a Federal Employer Identification Number (“EIN”).

 

III. CONTRIBUTIONS

The Partners will make an initial contribution to the Partnership as follows:

  • [insert name of Partner 1]: $[insert amount]
  • [insert name of Partner 2]: $[insert amount]

Contributions will be submitted no later than [insert date]. All capital contributions are final unless all partners give written consent of withdrawal. All contributions will be deposited into an individual capital account.

 

IV. INTEREST AND AUTHORITY

The Partners’ ownership interest in the Partnership will be as follows:

  • [insert name of Partner 1]: [insert percentage]%
  • [insert name of Partner 2]: [insert percentage]%

The Partners’ authority will be defined by the following unless otherwise stated in the Agreement: Any decisions requiring a contract or otherwise will require a unanimous vote by all Partners.

The Partnership qualifies and agrees to opt-out of appointing a partnership representative under 26 U.S. Code § 6221.

 

V. COSTS

The Partners will share costs according to the following percentages:

  • [insert name of Partner 1]: [insert percentage]%
  • [insert name of Partner 2]: [insert percentage]%

 

VI. PROFITS

The Partners will share the net profits of the Partnership according to the following percentages:

  • [insert name of Partner 1]: [insert percentage]%
  • [insert name of Partner 2]: [insert percentage]%

 

The Profits will be accounted for by [insert name] and distributed at the end of the month according to the above percentages after the costs of the Partnership have been paid according to the above cost percentages.

 

VII. SALARY

All Partners must give their unanimous consent if a permanent salary is to be established and their unanimous consent for the amount of salary to be given to each Partner.

 

VIII. ACCOUNTING

  • All accounts related to the Partnership including contribution and distribution accounts will be audited upon a majority vote of the Partners.
  • All Partners will maintain an individual contribution account. All Partners will maintain an individual distribution account. Partners will keep accurate and complete books of account for all accounts related to the Partnership.
  • Any Partner, whether majority or minority, will be allowed to review all books of account at any time they request.
  • Each Partner will be responsible for his or her own taxes on any distributions made.
  • Accounting records will be kept on a cash basis.
  • The fiscal year will be complete on the last day of [insert day] of each year. All Partners will present their position on the state of the Partnership within two weeks of the completion of each fiscal year.

 

IX. NEW PARTNERS

The Partnership will amend this agreement to include new partners upon the written and unanimous vote of all Partners.

The name of the Partnership may be amended if a new Partner is added to the Partnership upon the written and unanimous vote of all Partners.

 

X. WITHDRAWAL OR DEATH

The Partners hereby reserve the right to withdraw from the Partnership at any time. Should a Partner withdraw from the Partnership because of choice or death, the remaining Partners will have the option to buy out the remaining shares of the Partnership. Should the Partners agree to buy out the shares, the shares will be bought in equal amounts by all Partners. The Partners agree to hire an outside firm to assess the value of the remaining shares. Only upon the partners’ unanimous agreement will the outside firm’s valuation of the shares be considered final. The Partners will have [insert number] days to decide if they want to buy the remaining shares together and disperse them equally. If all Partners do not agree to buy the shares, individual Partners will then have the right to buy the shares individually. If more than one Partner requests to buy the remaining shares, the shares will be split equally among those Partners wishing to purchase the shares. Should all Partners agree by unanimous vote, the Partnership may choose to allow a non-Partner to buy the shares thereby replacing the previous Partner.

If no individual Partner(s) finalizes a purchase agreement by [insert number] days, the Partnership will be dissolved.

The name of the Partnership may be amended upon the written and unanimous vote of all Partners if a Partner is successfully bought out.

 

XI. DISSOLUTION

Should the Partnership be dissolved by unanimous vote, the Partnership will be liquidated, and the debts will be paid. All remaining funds after debts have been paid will be distributed based on the percentage of ownership interest outlined in this Agreement.

 

XII. AMENDMENTS

  • Amendments may be made hereto upon the unanimous and written consent of all Partners.
  • Amendments must be expressly written and have the original signatures of all Partners.
  • All amendments, notices, requests, claims, demands, and other communications between the parties shall be in writing. All such written communications shall be given (i) by delivery in person, (ii) by a nationally recognized next day courier service, (iii) by first-class, registered or certified mail, postage prepaid, (iv) by facsimile or (v) by electronic mail to the addresses of the parties specified in this Agreement or such other addresses specified in writing. All notices shall be effective upon (i) receipt by the party to which the written communication is given, or (ii) on the 5th day following mailing, whichever occurs first.

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered in the manner prescribed by law as of the Effective Date first written above.

 

By: ___________________________________ Date: __________________