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Partnership Agreement – Long Form
Partnership Agreement – Long Form
A partnership agreement is a document that formalizes the partnership of two or more people (not a husband and wife) in their ownership of a for-profit business. The Partnership Agreement – Long Form differs from the Short Form because it includes additional provisions governing termination, buyout of a partner and other subjects. Typically in a partnership each partner will participate in the control of the business and directly share in its profits. The consequence of this arrangement is that partners will also be liable for the partnership's debts and obligations. Because a partnership is defined broadly by state law, there is considerable flexibility in how it is formed and governed, which also leads to variations in its complexity. Generally, nothing is required to establish a business as a partnership; it will happen automatically when two or more people own a business together and do not designate the enterprise as some other type of business entity (e.g. corporation or LLC). But by creating a partnership agreement, you can spell out how the business will operate and the commitments of the parties, including: i) the nature of each partner’s contribution to the business, ii) how the partners will share profits and loses, and iii) decision making, authority and responsibility. If the owners of the business do not make a written partnership agreement, state partnership law will dictate the rights and obligations of the owners. The laws governing partnerships may differ dramatically from state to state (e.g. some may require a registration of the partnership and partnership agreement); therefore you should become familiar with the laws of your state before entering into a partnership agreement. Furthermore, before using this form you should consult with your attorney to ensure that it addresses the needs of your specific situation.
This Partnership Agreement (the “Agreement”) is made as of _______________, ___________, by and between _______________________________________ and _______________________________________ (each a “Partner,” collectively referred to as the “Partners”). WHEREAS the parties wish to enter into a partnership with one another and formalize such partnership with a written agreement setting out its terms and conditions; NOW THEREFORE, in consideration for the promises set forth in this Agreement, the Parties agree as follows: 1. Name and Business: The parties hereby form a partnership under the name of ____________________________________________________________ (the “Partnership”). The Partnership’s business is to ______________________ ________________________________________________________________ (provide short description) and to engage in any other business that the Partners may determine from time to time in accordance with this Agreement. 2. Principal Place of Business: The principal place of business of the Partnership shall be ______________________________________________ _______________________________________________________________ and may be changed from time to time by agreement of the Partners. 3. Term: The term of the Partnership will begin on _____________________, _________________ and will continue until terminated as provided in this Agreement. 4. Capital Contribution: On or before ___________________ (provide date), each Partner shall contribute the capital described next to his/her name below (the “Initial Contributions”). INITIAL CAPITAL CONTRIBUTION $ $ $ $
costs or credit shall be shared by the Partners in the following proportions (“Partnership Interest”): PARTNER PARTNERSHIP INTEREST % % % % 100% TOTAL 7. 6. 3) the Partner’s share of the Partnership’s profits as decreased by his/her share of the Partnership’s loses and distributions (the “Capital Accounts”). B. Distributions: the Partnership will only make distributions in accordance with this Agreement and if all the Partners agree to such a distribution. loss. No Partner shall be allowed to withdraw from his/her Capital Account without the written consent of all of the other Partners. no Partner shall: A. 9. Management A. deductions. Capital Accounts: The Partnership will establish and maintain individual capital accounts for each Partner which will consist of: 1) the Partner’s Initial Contribution. 2) any additional capital contributed by the Partner to the Partnership. Accounting: Accurate and complete books of account shall be kept by the Partners and entries promptly made of all of the transactions of the Partnership. 10. Prohibited Acts: Without the consent and agreement of Partners having an aggregate Partnership Interest of not less than ________%. Hire or discharge any employee for the Partnership’s business.5. Such books and records shall be maintained at the principal office of the Partnership and each Partner shall have access to the books and records at all reasonable times. 8. Checks: Checks in the name of the Partnership may/must (circle one) be signed by: (name the Partners)___________________________ ________________________________________________________________. Operations: Except as all of the Partners may otherwise agree in writing. Partnership Agreement--Long 2 . the Partners shall have equal rights in the management of the business in the ordinary course of business. Profits and Losses: the profits and losses of the Partnership and all income.
Sign a lease on behalf of the Partnership. H. Purchase any property or goods on behalf of the Partnership with an aggregate value greater than $_________________. if any. The Partnership will terminate at any time upon unanimous agreement of the Partners. E. Salaries: Each Partner will receive the salary in the amount appearing next to his name. the Partners will promptly liquidate the Partnership business and assets and wind-up its business by selling all of the Partnership assets. encumber.) 12. write “none” in the box above. F. Withdrawal. Sign a security agreement or mortgage on behalf of the Partnership. transfer or otherwise dispose of his Partnership Interest. unless: i) the remaining Partners all agree to such a disposition of Partnership Interest and ii) the proposed transferee agrees to be bound by all provisions of this Agreement and to become a Partner as described herein. Transfer of Partnership Interests and Rights: No Partner shall sell. C. the remaining Partners must within thirty (30) days: i) unanimously Partnership Agreement--Long 3 . or I. Enter into any agreement or series of agreements on behalf of the Partnership with an aggregate value greater than $___________________. and by distributing the balance. Upon the decision to terminate. as computed after reflecting all losses or gains from such liquidation in accordance with each Partner's share of the net profits and losses as determined under Section 6. to the Partners in accordance with their Capital Accounts. in whole or in part.B. 13. B. mortgage. Forgive any debt on behalf of the Partnership. If one Partner notifies the other Partners of his intention to withdraw. Borrow money or otherwise contract any debt on behalf of the Partnership which would require additional capital or further borrowing. paying all Partnership liabilities. Termination of Partnership: A. D. 11. Confess judgment against the Partnership. assign. G. PARTNER SALARY $ $ $ $ (If no Partner is to receive a salary. Pledge the credit of the Partnership except for minor transactions in the ordinary course of business with an aggregate value of less than $_________________________. Unanimous Agreement.
Cumulative Rights: The Partners’ rights under this Agreement are cumulative.agree to buyout the withdrawing Partner’s Partnership Interest and continue the Partnership or ii) terminate the Partnership. Binding Effect: The covenants and conditions contained in the Agreement shall apply to and bind the Partners and their heirs. legal representatives. the remaining Partners will pay the withdrawing Partner or his/her estate the following: (check the applicable box denoting the appropriate buyout mechanism) [_] the balance of the withdrawing or deceased Partner’s Capital Account reflecting all losses or gains at the time of the withdrawal. [_] the fair market value of the withdrawing or deceased Partner’s capital account as determined by an appraiser selected by the Partnership. Partnership Agreement--Long 4 . death or declared incompetentcy. Name: If one of the Partners withdraws. within thirty (30) days after the decision for such a buyout. Waiver: The failure of the Partners to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of the Partners’ right to subsequently enforce and compel strict compliance with every provision of this Agreement. as discussed in Section 13 above. and shall not be construed as exclusive of each other unless otherwise required by law. 17. dies or is declared incompetent. Partner Death. 14. the Partnership name shall remain the property of the remaining Partners. 18. successors and permitted assigns. In the event any Partner dies or is declared incompetent by a court of competent jurisdiction. Buyout: If the remaining Partners decide to buyout a withdrawing. [_] other: _________________________________________________________ ________________________________________________________________ ________________________________________________________________ 15. deceased or incompetent Partner’s Partnership Interest as described in Section 13B and 13C above. the remaining Partners must within thirty (30) days: i) unanimously agree to buyout the deceased or incompetent Partner’s Partnership Interest and continue the Partnership or ii) terminate the Partnership. 16. C.
Notice: Any notice required or otherwise given pursuant to this Agreement shall be in writing and mailed certified return receipt requested. whether oral or written. There are no other promises. Severability: If any part or parts of this Agreement shall be held unenforceable for any reason. conditions. addressed as follows: Partner Name: Address:_________________________ ________________________________ ________________________________ Partner Name: Address:_________________________ ________________________________ ________________________________ Partner Name: Address:_________________________ ________________________________ ________________________________ Partner Name: Address:_________________________ Partnership Agreement--Long 5 . or delivered by overnight delivery service. relating to the subject matter of this Agreement. 20. 21. Amendment: This Agreement may be modified in writing and must be signed by all Partners. Entire Agreement: This Agreement constitutes the entire agreement between the Partners and supersedes any prior understanding or representation of any kind preceding the date of this Agreement. the remainder of this Agreement shall continue in full force and effect. then such provision shall be deemed to be construed as so limited.19. understandings or other agreements. Such amendment shall be have the same force and effect as if it had been originally included in this Agreement. and if limiting such provision would make the provision valid. postage prepaid. If any provision of this Agreement is deemed invalid or unenforceable by any court of competent jurisdiction. 22.
________________________________ ________________________________ Any Partner may change his/her address from time to time by providing notice as set forth above. 23. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of _______________________________. [Remainder of page intentionally left blank] Partnership Agreement--Long 6 .
the parties have caused this Agreement to be executed the day and year first above written.IN WITNESS WHEREOF. PARTNER: ___________________________________________________ (Signature) __________________________________ (Name – Please Print) PARTNER: ___________________________________________________ (Signature) __________________________________ (Name – Please Print) PARTNER: ___________________________________________________ (Signature) __________________________________ (Name – Please Print) PARTNER: ___________________________________________________ (Signature) __________________________________ (Name – Please Print) Partnership Agreement--Long 7 .
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