Partnership Agreement Template
Establish a solid foundation for your business venture with this clear and balanced partnership agreement. It ensures both partners are aligned on contributions, ownership, and decision-making.
Preview
How to use this template
- Fill in the partnership details and contribution amounts.
- Review the management and profit-sharing clauses.
- Download the document as a PDF or copy the text.
- Sign the agreement with your partner to make it official.
When to use this template
Use a partnership agreement when two or more people start or run a business together without forming a company first. It sets out who contributes what, how profits and losses are shared, how decisions are made and what happens when a partner leaves.
Without a written agreement, the default partnership rules of your state or country apply, and those may not match what you agreed verbally. Writing it down early avoids the most common disputes.
Check before you sign
- Each partner's contribution (money, equipment, time, skills) is listed with a value where possible.
- Profit and loss shares are stated, including what happens if contributions change later.
- It is clear which decisions need all partners and which one partner can make alone.
- There is an exit route: notice, buy-out of the leaving partner's share and how it is valued.
- You have checked whether a company structure (such as an LLC) would protect you better against personal liability.
Full text of the partnership agreement template
This is the complete template. Words in [brackets] are filled in automatically when you use the form above; where the template has options, the form shows only the one you choose.
PARTNERSHIP AGREEMENT
1. Formation
[Partner 1 name], residing at [Partner 1 address], and [Partner 2 name], residing at [Partner 2 address], hereby agree to form a general partnership under the name [Partnership name]. This partnership begins on [Effective date].
2. Business Purpose
The Partners agree that the primary purpose of the partnership is: [Business purpose].
3. Principal Place of Business
The main office and operations of the partnership will be located at [Principal place of business].
4. Term
The partnership will continue indefinitely until it is dissolved according to the terms set forth in this agreement.
5. Capital Contributions
[Partner 1 name] shall contribute [Contribution of Partner 1] to the partnership.
[Partner 2 name] shall contribute [Contribution of Partner 2] to the partnership.
No partner shall receive interest on their capital contributions. Any additional contributions of capital shall only be made upon the unanimous written agreement of both Partners.
6. Profits and Losses
The net profits and losses of the partnership shall be shared as follows: [Profit and loss share Partner 1]% to [Partner 1 name] and [Profit and loss share Partner 2]% to [Partner 2 name].
Distributions of profits will be made at times agreed upon by the Partners, provided that a reasonable reserve for business expenses and liabilities is maintained.
7. Management
The Partners shall have equal rights in the management of the business. Either partner may make day-to-day operational decisions.
However, the written consent of both Partners is required for major decisions, including but not limited to: borrowing money in the partnership's name, making large capital purchases, admitting new partners, selling the business, or signing long-term contracts.
8. Duties of the Partners
Each partner agrees to act in good faith and in the best interests of the partnership. Partners shall devote the time and effort necessary to ensure the business succeeds.
Partners must disclose any potential conflicts of interest immediately. No partner may engage in any business that competes with the partnership without the prior written consent of the other partner.
9. Books, Bank Accounts, and Records
The partnership will maintain accurate financial records and books, which shall be kept at the principal place of business. Each partner has full access to these records at any time.
All partnership funds shall be deposited into a single partnership bank account.
10. Compensation and Drawings
Neither partner shall receive a salary for their services unless otherwise agreed in writing. Partners may take drawings from the partnership accounts, which will be applied against their respective shares of the profits.
11. New Partners
No new partners may be admitted to the partnership without the unanimous written consent of both existing Partners.
12. Leaving the Partnership
A partner may withdraw from the partnership by providing [Notice to leave the partnership] days' written notice to the other partner.
Upon such notice, the remaining partner has the right to continue the business and buy out the departing partner's share. The buyout value shall be determined by mutual agreement between the partners or, if they cannot agree, by an independent professional valuer.
13. Death or Incapacity
In the event of the death or permanent incapacity of a partner, the remaining partner may choose to continue the business. The remaining partner shall have the right to buy out the deceased or incapacitated partner's share from their estate using the same valuation process described in Clause 12.
14. Dissolution
The partnership may be dissolved at any time by mutual written agreement of the Partners.
Upon dissolution, the partnership's assets will be used in the following order: first, to pay all partnership debts and liabilities; second, to return the initial capital contributions to the partners; and finally, to divide any remaining assets according to the profit shares.
15. Dispute Resolution
If a dispute arises, the Partners agree to first attempt to resolve the matter through good-faith negotiations. If negotiations fail, the Partners agree to seek mediation before initiating any formal court proceedings.
16. Liability
The Partners acknowledge that in a general partnership, each partner may be held personally liable for the debts and obligations of the business.
To mitigate this risk, the Partners may consider establishing a separate legal entity, such as an LLC, and are encouraged to consult with a professional adviser regarding this option.
17. Governing Law
This agreement shall be governed by and construed in accordance with the laws of [Governing law].
18. General Provisions
This document constitutes the entire agreement between the Partners and supersedes any prior oral or written understandings. Any amendments to this agreement must be made in writing and signed by both Partners.
If any part of this agreement is found to be unenforceable, the remaining provisions shall continue to be valid and in full effect.
Signatures
Partner 1
Signature: ____________________
Name and title: ____________________
Date: ____________________
Partner 2
Signature: ____________________
Name and title: ____________________
Date: ____________________
Frequently asked questions
What is this contract for?
This agreement is designed for two individuals starting a general partnership. It outlines how the business will be run, how profits are split, and how disputes are handled.
What should this agreement include?
It should clearly state the business purpose, the amount of capital each partner is contributing, the percentage of ownership, and the process for leaving the partnership.
Is this template legally binding?
This document can become legally binding once signed by both parties. However, it is a general template and not legal advice; you should have a lawyer review it to ensure it fits your specific situation and jurisdiction.
What is the risk of a general partnership?
In a general partnership, partners can be held personally liable for the business's debts and legal obligations. You may wish to discuss forming an LLC or another entity with a professional adviser to limit this liability.
Can I edit the text?
Yes. Once you download or copy the text, you can modify any clause to better suit your specific business needs.
Is my data stored?
No. Your information stays in your browser and is not stored on our servers.
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