Partnership Agreement
This Partnership Agreement is made on Date of the agreement between Partner 1, of Partner 1 address, and Partner 2, of Partner 2 address (each a "Partner", together the "Partners").
1. Name and business
The Partners carry on the business of Nature of business in partnership under the name Firm name (the "Firm"). The principal place of business is Principal place of business. The Partners may add other places of business by agreement.
2. Start and duration
The partnership starts on Start date of the partnership. It continues until it ends under section 14.
3. Capital
The Partners contribute this capital:
- Partner 1: Partner 1 capital
- Partner 2: Partner 2 capital
The Firm keeps a capital account for each Partner. No interest is paid on capital unless the Partners agree in writing. No Partner has to add more capital, or may withdraw capital, without the agreement of all Partners. A loan by a Partner beyond agreed capital is a debt of the Firm.
4. Profits and losses
The Partners share net profits and bear losses in these proportions:
- Partner 1: Partner 1 profit share (%)%
- Partner 2: Partner 2 profit share (%)%
Profits are worked out after each accounting year, once the accounts are approved.
5. Drawings and pay
Each Partner may take drawings of up to Drawings each partner may take a month a month on account of their profit share, if the Firm has enough cash to pay its bills. Drawings are set against the Partner's share at the end of the year. If drawings exceed the share, the Partner repays the excess within 30 days of the accounts.
No Partner receives a salary unless all Partners agree in writing.
6. Duties of the Partners
Each Partner will:
- work in the business diligently and give it the time it needs
- act honestly and in good faith toward the Firm and the other Partners
- not run or join a competing business while a Partner
- tell the other Partners about any personal interest in a Firm deal
- pay any private profit made from the Firm's business or opportunities into the Firm
7. Decisions
Ordinary decisions are made by a majority of the Partners. These need the written consent of all Partners:
- changing the nature of the business or the Firm name
- admitting a new Partner
- borrowing, lending, or giving a guarantee in the Firm's name
- buying or selling a major asset
- changing profit shares or this agreement
8. Bank account and spending
The Firm keeps a bank account in its own name. Partners do not mix Firm money with their own. The account is operated by Who operates the bank account. Any single payment or commitment above Spending limit for one partner needs the approval of both Partners.
9. Books and accounts
The Firm keeps proper books of account at its principal place of business. Each Partner may inspect and copy them at any time. The accounting year ends on 31 December unless the Partners agree another date. Accounts are prepared within 3 months after the year end and signed by all Partners.
10. Tax
Each Partner pays the tax due on their own share of profits. The Firm files any partnership returns that the law requires.
11. New partners
A new Partner may join only with the written consent of all Partners. The new Partner must sign this agreement or a new one.
12. Leaving the partnership
A Partner may retire by giving Notice to leave (months) months' written notice to the other Partner. A Partner is treated as having retired on death, on bankruptcy, or after being unable to work in the business for 6 months in a row.
The other Partners may expel a Partner by written notice for fraud, dishonesty, a serious breach of this agreement that is not fixed within 30 days of notice, or bankruptcy.
When a Partner leaves, the Firm does not end. The remaining Partners may continue the business and buy the leaving Partner's share. The price is the balance of the leaving Partner's capital account, plus their share of undrawn profits to the leaving date, as shown in accounts prepared to that date. The Firm pays the price within 6 months, or in up to 12 monthly payments with interest if the Partners agree.
13. After leaving
A Partner who leaves stops using the Firm name and does not present themselves as a Partner. For 12 months after leaving, they do not try to take the Firm's clients or staff. The remaining Partners will try to have the leaving Partner released from the Firm's debts.
14. Ending the partnership
The partnership ends if all Partners agree in writing, if only one Partner remains and does not continue the business, or as the law requires.
On ending, the Partners stop new business, sell the assets or share them out, and use the money in this order:
- first, to pay the Firm's debts to outsiders
- next, to repay loans from Partners
- next, to repay each Partner's capital
- last, to share anything left in the profit-sharing proportions
15. Disputes
The Partners will first try to settle any dispute by talking in good faith. If that fails within 30 days, they will try mediation. If mediation fails, a single arbitrator chosen by the Partners will decide the dispute.
16. General
Changes to this agreement are valid only in writing signed by all Partners. This agreement is governed by the laws of Governing law (country or state).
Signatures
Partner 1
Signature: ____________________________
Date: ______________
Partner 2
Signature: ____________________________
Date: ______________