27 Nov Partnership Agreements – What is it and what do I need to consider?
Partnerships and Agreements
Each state (with the exception of Louisiana) has its own laws governing partnerships which are contained in what is normally called “The Uniform Partnership Act” or the “Revised Uniform Partnership Act”. These statues spell out the rules that apply to partnerships in that state. To find out what your state’s partnership statues see this link. This link will take you to the North Carolina Laws and Legal Information.
According to the legal website NOLO the following items should be included in any partnership agreement:
- Name of the partnership
- Contributions to the partnership will detail who is contributing cash, property or services to the business and who will receive what percentage of the business’ profits or losses.
- Allocation of profits, losses and draws. Will these items be allocated by a partner’s percentage interest in the business? Will partners be entitled to a ownership draw?
- Partner’s authority determines how an organization can enter into contracts. Without a policy any partner can legally and contractually bind the business without the others partners consent.
- Partnership decision making procedures example would include majority vote on major decisions
- Management duties for the everyday management of the business
- Admitting new partners into the partnership policies and procedures
- Withdrawal or death of a partner policies which would include a buyout scheme
The North Carolina Secretary of State has provided the following seven page Frequently Asked Questions document on Partnerships
Sample Limited Partnership Agreement
Sample Domestic Partnership Agreement Template