- Create a legally binding agreement
- Specify the responsibilities of partners under the agreement
A partnership agreement is a legally binding contract between two or more parties that should clearly control the symbiotic relationship of the parties. Although a partnership agreement does not have to be in writing for nearly all business purposes a written partnership agreement is a must.
The three types of partnerships are general partnership, limited partnership and limited liability partnership. The type of partnership that the parties choose will govern the specific information that is needed for the partnership agreements.
Although it is possible to set up a partnership without a formal written partnership you will need and should have a partnership agreement anytime parties decide to form a partnership.
A partnership agreement is based upon symbiosis in that each partner should, in essence, benefit the other parties to the agreement. A partnership allows parties to aggregate or pool the resources, talents, funds, and property of the members of the partnership which in turn should produce a profit for all.
Partners in general partnerships are jointly liable for the debts of the partnership. If there is a partner would have created a lot of encumbrances for the partnership, then all will be considered as responsible for resolving the issue or “making good” on the debts and honouring the commitments of the partnership. A partnership agreement is needed to emphasize this joint liability before the partnership is formed; it is incumbent that each partner is aware of his or her liability up front.
A partnership Agreement serves as the framework and guideline on how the partnership should operate at any given time. Without a partnership agreement, the parties who have maintained a great personal relationship prior to the formation of the partnership may have to resort to protracted litigation to resolve major partnership problems.
A partnership agreement can be extensive or it can be concise however there are several elements that must be present in all partnership agreements. These elements are as follows:
A partnership agreement is based upon symbiosis in that each partner should, in essence, benefit the other parties to the agreement. A partnership allows parties to aggregate or pool the resources, talents, funds, and property of the members of the partnership which in turn should produce a profit for all.
Partners in general partnerships are jointly liable for the debts of the partnership. If there is a partner who would have created a lot of encumbrances for the partnership then all will be considered as responsible for resolving the issue or “making good” on the debts and honoring the commitments of the partnership.
£14.95Add to cart
Get the legal documents and services you need today.
Create the Legal Documents You Need in Three Easy Steps