List every partner (including the two above and any others) on its own line in the form “Name — contribution — %”. Percentages should total 100%.
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This Partnership Agreement (this “Agreement”) is entered into as of ____________ (the “Effective Date”) by and among ____________, ____________, and each other person listed in the section titled “Partners & Capital Contributions” below (each a “Partner” and together the “Partners”), who agree to carry on business together as a general partnership on the terms set out in this Agreement.
The Partners hereby form a general partnership under the laws of the State of ____________ (the “Partnership”), to be conducted under the name “____________” or such other name as the Partners may adopt in compliance with applicable law, including any required assumed-name filings. The Partnership begins on the Effective Date and continues until dissolved in accordance with this Agreement.
The purpose of the Partnership is: ____________; together with any activities necessary or incidental to that purpose, and any other lawful business the Partners approve. The principal place of business of the Partnership is ____________, or such other location as the Partners may designate.
The Partners, their initial capital contributions, and their respective ownership percentages are as follows:
____________
Each Partner shall make the Partner's initial contribution within thirty (30) days after the Effective Date. No Partner is required to make additional capital contributions without that Partner's written consent. No interest accrues on capital contributions, and no Partner may withdraw capital except as part of a distribution approved under this Agreement. A separate capital account shall be maintained for each Partner.
Net profits and net losses of the Partnership shall be allocated among the Partners in proportion to their respective ownership percentages. Distributions of available cash shall be made at such times and in such amounts as the Partners determine by majority vote, allocated on the same basis, after retaining reasonable reserves for the Partnership's obligations and working capital. Each Partner is responsible for taxes on the Partner's allocated share of profits whether or not distributed.
No Partner shall receive a salary or regular draw for services rendered to the Partnership. A Partner's compensation is the Partner's share of profits, unless the Partners agree otherwise in writing.
Each Partner shall have a voice in the management of the Partnership in proportion to the Partner's ownership percentage. Decisions in the ordinary course of business require the approval of Partners holding a majority of the ownership percentages. The following major decisions require the unanimous written consent of all Partners: (a) borrowing money or incurring any obligation over amounts the Partners set for ordinary business; (b) selling, leasing, or encumbering Partnership assets outside the ordinary course of business; (c) admitting a new partner; (d) amending this Agreement; (e) entering into any contract materially outside the Partnership's stated purpose; and (f) confessing a judgment, or commencing or settling material litigation, on behalf of the Partnership. No Partner may bind the Partnership outside the ordinary course of business without the approval required by this Section.
Each Partner shall devote such time and reasonable efforts to the Partnership's business as the business reasonably requires, act in good faith and in the best interests of the Partnership, and deal fairly with the Partnership and the other Partners. While a Partner remains a partner, the Partner shall not, without the prior written consent of the other Partners, directly or indirectly engage in any business that competes with the Partnership or divert any business opportunity within the Partnership's stated purpose away from the Partnership. Each Partner shall promptly account to the Partnership for any benefit derived from Partnership property or business.
The Partnership shall keep complete and accurate books of account at its principal place of business, and each Partner may inspect and copy them at any reasonable time. The fiscal year of the Partnership is the calendar year. All Partnership funds shall be deposited in accounts in the Partnership's name and shall not be commingled with any Partner's personal funds; withdrawals may be made only by Partners or agents authorized by majority vote. The Partnership shall cause required tax returns to be prepared and shall deliver to each Partner the information needed for the Partner's own returns.
No person may be admitted as a partner of the Partnership except with the unanimous written consent of all Partners and upon the new partner's execution of a written joinder agreeing to be bound by this Agreement. Upon admission, the Partners shall record in writing the new partner's contribution and the adjusted ownership percentages.
A Partner may voluntarily withdraw from the Partnership by giving the other Partners at least 90 days' prior written notice. Upon a Partner's withdrawal, death, or permanent incapacity, the Partnership shall not automatically dissolve; the remaining Partners may elect, by written notice within sixty (60) days, to continue the business and purchase the departing Partner's interest. The purchase price shall be a value agreed in writing by the departing Partner (or the departing Partner's estate) and the remaining Partners; if they cannot agree within thirty (30) days, the value shall be the fair market value determined by an independent appraiser selected by the remaining Partners, with the appraisal cost shared equally. The purchase price shall be paid in full at closing or, at the remaining Partners' election, in up to twelve (12) equal monthly installments with simple interest at a commercially reasonable rate. Pending closing, the departing Partner (or estate) is entitled to the Partner's share of profits but has no further voice in management. If the remaining Partners do not elect to continue the business, the Partnership shall be wound up under the section titled “Dissolution.”
The Partnership shall be dissolved upon the first to occur of: (a) the unanimous written consent of all Partners; (b) the sale of all or substantially all of the Partnership's assets; or (c) any event requiring dissolution under applicable law where the business is not continued as provided in this Agreement. Upon dissolution, the Partners shall wind up the Partnership's affairs and apply the proceeds of liquidation in the following order: first, to creditors of the Partnership (including Partners who are creditors); second, to reasonable reserves for contingent liabilities; and third, to the Partners in accordance with their positive capital account balances, and thereafter in the same proportions as profits are shared.
All notices under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by certified mail (return receipt requested) to the addresses stated in this Agreement, or sent by email with confirmation of receipt.
This Agreement shall be governed by and construed in accordance with the laws of the State of ____________, without regard to its conflict-of-laws principles.
Any dispute arising out of or relating to this Agreement shall be resolved exclusively in the state or federal courts located in ____________, and each party consents to the personal jurisdiction of those courts.
If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect, and the invalid provision shall be modified to the minimum extent necessary to make it valid and enforceable.
No failure or delay by either party in exercising any right under this Agreement shall operate as a waiver of that right. A waiver of any breach shall not be construed as a waiver of any subsequent breach.
This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous understandings, agreements, negotiations, and discussions, whether oral or written. This Agreement may be amended only by a written instrument signed by both parties.
This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures delivered electronically (including through a reliable electronic signature service) shall be deemed original signatures for all purposes, consistent with the U.S. ESIGN Act and applicable state law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date, intending to be legally bound.