A Partnership Agreement is the key document that forms the foundation of your business partnership, protecting and aligning all your interests and those of your partners. It is a document that governs the relationship between you and the other partners in the newly created business.
If you decide to set up a business as a partnership, then you need to make sure that the relationship between the partners is controlled and regulated by a Partnership Agreement (also known as a Partnership Deed). You might trust the other partners in your business, but this contract will make sure that the business is run in a professional and cooperative way. A Partnership Agreement details key areas, such as how much of the business each partner owns, how the profits are distributed, what decisions must be made by all the partners, and what individual partners can and can't do on behalf of the business. It also sets out rules for what happens when partners leave or are dismissed or when new partners join.
When drafting a Partnership Agreement, it is important to focus on a number of key clauses, in particular:
General Partnership Agreement, Business Partnership Agreement, Partnership Contract, and Create Partnership.