When starting a business with a partner, it`s important to establish the terms of your partnership before diving in. A general partnership agreement outlines the expectations, obligations, and rights of each partner in a business venture. Whether you`re co-owning a small business or starting a joint venture, having a clear partnership agreement can prevent disagreements and misunderstandings down the line.
If you`re looking for a general partnership agreement template, a quick Google search will yield many options, including PDF versions that can be easily downloaded and edited. These templates provide a basic framework for your partnership agreement, but it`s important to customize them to fit your specific needs and circumstances. Here are some key elements to consider when drafting your agreement:
1. Partnership Structure
Your agreement should outline the type of partnership you`re forming. Are you forming a general partnership, where each partner shares equal responsibility and liability? Or are you forming a limited partnership, where one partner has more control and liability than the other(s)? Make sure this is clearly stated in your agreement.
Each partner`s contributions to the partnership should be clearly defined. This includes financial contributions as well as non-financial contributions like time and expertise.
3. Profit and Loss
Your agreement should specify how profits and losses will be divided among partners. Will each partner receive an equal share, or will it be based on the percentage of contributions?
Who will manage the day-to-day operations of the business? Will it be one partner or will it be a joint effort? Will decisions need to be made unanimously or by a majority vote? These details should be included in your agreement.
5. Dispute Resolution
No matter how well you plan, disagreements may arise between partners. Your agreement should outline how disputes will be resolved, whether through mediation, arbitration, or litigation.
These are just a few of the key elements that should be included in a general partnership agreement. It`s important to consult with a lawyer or accountant to ensure that your agreement complies with state laws and regulations. A well-written and detailed partnership agreement can help prevent conflicts and pave the way for a successful business partnership.