# Partnership agreement template

Source: https://contracko.com/de/vertragsvorlagen/partnership-agreement

# Partnership agreement template

A comprehensive legal contract between business partners defining ownership percentages, capital contributions, profit and loss distribution, management duties, decision-making authority, partner withdrawal procedures, dispute resolution, and dissolution terms for general or limited partnerships.

## Partnership Agreement

This Partnership Agreement (the "Agreement") is entered into on 2023-10-01 (the "Effective Date") by and between:

Partner 1: Name: John Doe Address: 123 Main St SSN/EIN: 000-00-0000

Partner 2: Name: Jane Smith Address: 456 Market St SSN/EIN: 000-00-0000

### 1. Formation and Name

Partnership Name: My Partnership

Type: General Partnership (General Partnership / Limited Partnership / Limited Liability Partnership)

Principal Place of Business: 789 Business Rd

Purpose: To operate a retail business

Term: perpetual (perpetual / until 2030-12-31 / until dissolved)

Formation Date: 2023-10-01

State of Formation: Delaware

### 2. Capital Contributions

Initial Contributions:

| Partner | Cash | Property | Services | Total Value | Ownership % |
| --- | --- | --- | --- | --- | --- |
| John Doe | $10000 | None | None | $10000 | 50% |
| Jane Smith | $10000 | None | None | $10000 | 50% |

Total Initial Capital: $20000

Contribution Deadline: All initial contributions due by 2023-10-15

Property Contributions: Property valued at valuation method (fair market value / agreed value / appraisal)

Additional Contributions:

- Required if: additional contribution trigger
- Proportional to ownership: proportional contributions
- Approval required: contribution approval (unanimous / majority)

Failure to Contribute: Partner failing to contribute faces: failure consequence (reduced ownership / buy-out / default)

Capital Accounts: Separate capital account maintained for each partner

### 3. Profit and Loss Distribution

Profit Distribution: profit distribution method

Distribution Percentages:

- John Doe: p1 profit percentage%
- Jane Smith: p2 profit percentage%
- partner 3 name: p3 profit percentage%

Loss Allocation: loss allocation (same as profit / different: loss percentages)

Distribution Timing: distribution frequency (quarterly / annually / as decided)

Retained Earnings: Minimum retained percentage% of profits retained for: retention purpose

Tax Allocations: Follow capital account balances and comply with IRC Section 704(b)

Draws: Partners may take draws: draw policy

- Maximum monthly draw: max monthly draw
- Approval required: draw approval

### 4. Management and Decision-Making

Management Structure: management structure (all partners equal / managing partner(s) / delegated authority)

Managing Partner(s): managing partners (if applicable)

Day-to-Day Decisions: daily decision authority (any partner / managing partner / majority vote)

Major Decisions Requiring Unanimous Consent:

- Admitting new partners
- Amending partnership agreement
- Selling or encumbering partnership assets over major asset threshold
- Borrowing over borrowing threshold
- Entering contracts over contract threshold
- Changing business purpose
- Dissolving partnership
- additional unanimous decisions

Majority Decisions: Decisions requiring majority percentage% vote:

- Hiring key employees
- Major expenditures over expenditure threshold
- Lease commitments
- majority vote decisions

Voting: voting method (per capita / by ownership percentage)

Meetings: meeting frequency (monthly / quarterly / as needed)

Notice: meeting notice days days notice required for meetings

### 5. Duties and Responsibilities

Partner Roles:

John Doe:

- Title: p1 title
- Responsibilities: p1 responsibilities
- Time commitment: p1 time commitment

Jane Smith:

- Title: p2 title
- Responsibilities: p2 responsibilities
- Time commitment: p2 time commitment

partner 3 name:

- Title: p3 title
- Responsibilities: p3 responsibilities
- Time commitment: p3 time commitment

Compensation for Services: partner compensation (draws only / salaries: salary amounts / none)

Equal Effort: Partners agree to devote effort requirement to partnership business

### 6. Books and Records

Accounting Method: accounting method (cash / accrual)

Fiscal Year: fiscal year end

Records Location: records location

Access: All partners have right to inspect books and records with inspection notice days days notice

Financial Statements: Prepared financial statement frequency

Tax Returns: Partnership tax return (Form 1065) filed by tax filing deadline

Accountant: accountant name (or as agreed)

Annual Audit: audit requirement (required / not required / if revenues exceed audit threshold)

### 7. Banking and Finances

Bank Account: Maintained at bank name

Signatories: check signing authority (any partner / two partners / managing partner)

Expenditure Limits: Individual partner may spend up to individual spending limit without approval

Credit and Loans: Borrowing requires borrowing approval (unanimous / majority) for amounts over loan threshold

### 8. Restrictions on Partner Authority

No partner may, without written consent of all partners:

- Bind partnership beyond ordinary course of business
- Assign partnership property
- Admit new partners
- Settle or submit partnership claim to arbitration
- Confess judgment against partnership
- additional restrictions

### 9. Admission of New Partners

Admission Process: Requires new partner approval (unanimous consent / new partner vote% vote)

Terms: New partner's capital contribution, ownership percentage, and rights determined by existing partners

Valuation: Partnership valued at valuation for new partners for admission purposes

### 10. Withdrawal, Death, or Disability

Voluntary Withdrawal: Partner may withdraw with withdrawal notice months months written notice

Buy-Out Upon Withdrawal:

- Withdrawing partner receives: withdrawal valuation (book value / fair market value / formula: valuation formula)
- Payment terms: withdrawal payment terms

Death of Partner:

- Partnership death continuation (continues / dissolves)
- Estate entitled to: estate entitlement
- Buy-out by remaining partners: death buyout terms

Disability:

- Defined as inability to perform duties for disability months months
- Disabled partner: disability treatment

Life Insurance: Partners agree to maintain life insurance: life insurance requirement

- Amount: insurance amount per partner
- Beneficiary: insurance beneficiary (partnership / cross-purchase)

Buy-Sell Agreement: buy sell attached (attached as Exhibit A / to be executed separately)

### 11. Non-Compete and Confidentiality

Non-Compete: During partnership and for non compete years years after departure, partners may not:

- Engage in competing business within non compete territory
- Solicit partnership clients or employees
- non compete restrictions

Confidentiality: Partners must maintain confidentiality of:

- Trade secrets
- Client information
- Financial information
- Business strategies

Duration: Confidentiality obligations survive termination indefinitely

### 12. Dispute Resolution

Mediation: Disputes first submitted to mediation in mediation location

Arbitration: If mediation fails, binding arbitration under arbitration rules (AAA / JAMS)

Arbitration Location: arbitration location

Costs: dispute cost allocation (shared equally / prevailing party)

Governing Law: Laws of governing state

### 13. Dissolution and Winding Up

Dissolution Events:

- Unanimous vote of partners
- Withdrawal/death of partner (if not continuing)
- Bankruptcy of partnership
- Illegality of business
- Expiration of term
- dissolution events

Winding Up Process:

1. Cease new business
2. Liquidate assets
3. Pay creditors
4. Distribute remaining assets per ownership percentages

Liquidation Preference: liquidation preference

Final Accounting: Within final accounting days days of dissolution

### 14. Indemnification

Partnership shall indemnify partners against liabilities incurred in ordinary course of business, except for:

- Willful misconduct
- Gross negligence
- Breach of agreement
- Ultra vires acts

### 15. Amendments

Amendment Process: Requires amendment approval (unanimous / amendment percentage% vote)

Written Requirement: All amendments must be in writing and signed

### 16. General Provisions

Entire Agreement: Constitutes entire understanding

Severability: Invalid provisions don't affect remainder

Waiver: Failure to enforce doesn't waive rights

Notices: In writing to addresses above; effective upon receipt

Counterparts: May be executed in counterparts

Binding Effect: Binds heirs, executors, successors, and assigns

### 17. Signatures

IN WITNESS WHEREOF, the partners have executed this Agreement as of the Effective Date.

PARTNER 1

Date: 2023-10-01

Name: John Doe

Signature: _____________________________

PARTNER 2

Date: 2023-10-01

Name: Jane Smith

Signature: _____________________________

## Vorlage anpassen

Effective Date

Partnership Term

Termination Date

Formation Date

Contribution Deadline

Tax Filing Deadline

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## Häufig gestellte Fragen

- **Q:** Do I need a Partnership Agreement?
  **A:** Yes, without one, your partnership will be governed by state default laws, which may not align with your intentions regarding liability and profit sharing.

- **Q:** What is the difference between a general partnership and a limited partnership?
  **A:** In a general partnership, all partners share management responsibilities and unlimited liability. In a limited partnership, general partners manage the business and have unlimited liability, while limited partners are passive investors with liability limited to their investment.

- **Q:** How are profits and losses divided in a partnership?
  **A:** By default, profits and losses are split equally among partners. However, the partnership agreement can specify different allocation ratios based on capital contributions, effort, or other factors agreed upon by the partners.

- **Q:** Can a partner sell their ownership stake?
  **A:** Transfer of partnership interest typically requires consent of other partners as specified in the agreement. The agreement should include right of first refusal provisions and buyout procedures to protect remaining partners.

- **Q:** How should a partnership agreement handle deadlocks when partners disagree?
  **A:** Deadlock provisions are critical for two-partner businesses where a 50/50 vote can stall decisions indefinitely. Common mechanisms include designating a tiebreaker partner for specific categories of decisions, requiring mediation before any partner can force a dissolution, or including a "shotgun" buyout clause where one partner names a price and the other must either buy at that price or sell at it. Choosing the right mechanism depends on the business and the partners' relationship.

## Verwandte Vorlagen

### [LLC operating agreement template](https://contracko.com/de/vertragsvorlagen/llc-operating-agreement)

### [Separation agreement template](https://contracko.com/de/vertragsvorlagen/separation-agreement)

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