Partnership agreement template

Partnership agreement

Starting text for counsel. Replace every bracket. Do not ask anyone to sign until a lawyer has adapted this text to the parties and to the law that will govern it.

This partnership agreement is made on [Effective date] between [Partner A legal name], of [Partner A address] ("Partner A"), and [Partner B legal name], of [Partner B address] ("Partner B"). They will carry on [Venture] together. Signing this text does not by itself create a corporation, a limited company, or a tax registration. Counsel names the vehicle at [Entity], or writes that the partners will operate without a separate entity if that is lawful.

1. The venture

The partners will carry on only the activity described at [Venture description]. A later activity is outside this text until both partners sign a change that adds it. The venture starts on [Start date] and continues until it is ended under the leaving section. Neither partner may bind the venture to a contract outside [Ordinary decisions] without the other's written consent. A partner who signs such a contract anyway is responsible for it to the other partner. The venture name, if any, is [Venture name], and a partner does not register that name unless [Name filing] says that partner will do it.

2. What each partner puts in

Partner A contributes [Partner A contribution]. Partner B contributes [Partner B contribution]. Money is paid to the account at [Venture account] by [Contribution date]. Property is listed with enough detail to identify it, and the partner who contributes it states that they can contribute it. Time is described as a task, not as an employment. A contribution that arrives late does not, by itself, reduce that partner's share unless [Late contribution] says so. Neither partner may take a contribution back while the venture continues, except for a return of expenses approved under the money section. A partner who withdraws money that is not approved replaces it within [Replace days] days.

3. Shares and decisions

Profit and loss are shared [Share split]. The split applies to the venture only, not to a partner's other business. Ordinary decisions listed at [Ordinary decisions] may be made by either partner, who then tells the other in writing. Decisions listed at [Major decisions], including a debt above [Debt limit], a new partner, or an end to the venture, need both partners. A partner may not raise the debt limit alone. If the partners cannot agree on a major decision for [Deadlock days] days, counsel writes the next step at [Deadlock], which may be a pause, a buyout, or an end. Silence is not a vote.

4. Money in and money out

The partners keep the venture's money in the account named above. A partner pays a venture expense from personal funds only if it is listed at [Expenses] or approved in writing first, and the venture repays that expense from available money. A draw of profit is allowed only at [Draw times] and only to the extent of that partner's share of profit already earned. A draw is not a salary and it is not a guarantee of profit. Losses are borne in the same split as profit, unless [Loss split] states a different split that counsel has checked. Tax is each partner's own affair except for a filing [Tax filing] assigns to one partner as a coordinator, not as a promise that the filing is correct.

5. Care of the venture

Each partner gives the venture the attention [Time commitment] describes and does not start a competing activity described at [Competing activity] while they are a partner. That limit is only as wide as counsel writes, because some limits are not enforceable. A partner discloses a conflict at [Conflict] before the venture relies on the partner's advice. Each partner keeps the venture's non-public information private for [Confidentiality period] after they leave. They do not use a customer list of the venture to solicit those customers during [Solicit period], except for a general advertisement that is not aimed at them. Counsel deletes any sentence in this section that the governing law would not enforce.

6. A new partner or a leaving partner

A new partner joins only when all current partners and the new partner sign a written admission that states the new contribution and the new split. A partner may leave by written notice of [Leaving notice]. The remaining partner may buy the leaving partner's share at the value set by [Valuation] within [Buyout days] days. If the remaining partner does not buy, counsel writes at [Unbought share] whether the venture ends or the leaving partner keeps a passive share. Death or a permanent inability to work is treated as a leaving on the date the others learn of it, unless [Continuation] names a person who may step in. The leaving partner signs the papers counsel needs to release them from a venture debt that the others agree in writing to take.

7. Books

The partner named at [Bookkeeper] keeps the books and a copy of each signed contract of the venture. The other partner may inspect them on [Inspection days] days' notice during ordinary hours and may copy them. Once a year the bookkeeper gives a simple statement of contributions, expenses, draws, and the remaining money. A partner who disagrees with a line objects in writing within [Objection days] days, and the partners then review that line. An objection does not stop an undisputed payment. The books stay the venture's records. A partner does not destroy them when they leave. They hand over passwords to the account and to the books on the leaving date.

8. Law and the end

The laws of [Governing law] govern this text. The parties name the courts of [Courts]. When the venture ends, the partners finish work already promised, collect what is owed, pay the venture's debts, and then distribute what remains in the share split. A partner does not take a customer file or a tool the venture bought. Tools a partner contributed and that were not transferred stay with that partner, listed at [Returned property]. The signed PDF is the whole agreement about this venture and replaces earlier oral plans about the same venture. A change is effective only when every partner signs it. If one sentence cannot be enforced, the rest stays. This web page does not form the venture and it does not file anything with a registry.

Signatures

Partner A

Name: [Partner A signatory name]

Title: [Partner A signatory title]

Signature: ______________________________

Date: [Partner A signature date]

Partner B

Name: [Partner B signatory name]

Title: [Partner B signatory title]

Signature: ______________________________

Date: [Partner B signature date]