NEW PARTNERSHIP: KEY POINTS FOR CONSIDERATION

1. GENERAL

1.1 Should the partnership have a minimum duration so that no Partner can retire during this
period? Yes
Or should any Partner be able to leave on an agreed notice period? If yes, what period? 1
month.
Are there to be specific conditions for leaving the partnership? Yes. If yes, [provide details].

1.2 Changes in the business such as the introduction of a new Partner or the opening of new
offices should be agreed by all partners.

1.3 When one Partner leaves the partnership should end.

1.4 Expulsion of a partner can be effected by the agreement of all partners.

What are the grounds for expulsion? [provide details].

2. FINANCIAL

2. 1 In what proportions are the net profits of the business to be shared? [provide details].

2. 2 Are particular Partners to be entitled to the profits of particular offices or are the profits of the
offices to be pooled before divided? [provide details].
Similarly, what is the position concerning the out-goings of particular offices? [provide
details].

2. 3 Should some of the Partners be paid a "salary" as a first charge on profits before they are
divided? [provide details].

2. 4 Should the Partners be allowed to make drawings from the firm's account on account of
profits. Yes.
If so, what should the maximum amount of drawings be for each partner? [provide details].

2. 5 Is the signature of more than one Partner to be needed for cheques? Yes. Is there to be any
maximum amount above which the signatures of more than one Partner are needed? [provide
details].

3. PARTNERSHIP PROPERTY

3. 1 The offices to be treated as the property of the partnership .

3. 2 What are to be the amount of the contributions of the Partners to the capital of the firm?
[provide details].

3. 3 If the capital of the firm is increased in what proportion should the Partners advance the
additional capital? [provide details].

3. 4 Should the Partners be entitled to interest on the capital contributed by them as a first charge
on profits? Yes. If so what should the rate of interest be? [provide details].

4. PROVISION FOR A PARTNER LEAVING

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4. 1 Is a Partner to be entitled to sell his share of the business to an outsider? Yes.
If the remaining Partners are to have a right of first refusal how is the share of the outgoing
Partner to be apportioned between them [provide details].
How is the price of the share to be fixed? [provide details].
Is the price of the share of the outgoing Partner to include goodwill? Yes.

4. 2 In the event of a Partner dying or leaving the business, his share is to be payable by the
remaining partners in a lump sum. If instalments, over what period are they to be paid
[provide details], and what provisions for interest on unpaid instalments should there be
[provide details]?

4. 3 Should a Partner leaving the Partnership be prevented from competing with the business or
soliciting customers? If so, for how long are these restrictions to apply and how large should
the area be within which the outgoing Partner will not be allowed to complete?

4. 4 Should the remaining Partners provide a pension or annuity for an outgoing Partner and his
dependants? Alternatively, should the Partners be required to take out a personal pension, and
if so what should his minimum contribution be?

4. 5 Should the Partners take out Life Insurance Policies on each others lives as a way of ensuring
that a deceased Partner’s personal representatives can be paid his share of the business
immediately?

5. RUNNING A BUSINESS

5. 1 Should all Partners be required to divert the whole of their time to the Partnership business or
should/are some or all of them be allowed to carry on other activities as well?

5. 2 Should any income derived by a Partner from activities outside the firm be treated as
Partnership money or as his personal income?

5. 3 What should be the holiday entitlement of each Partner?

5. 4 Should the other Partners have the right to retire a Partner suffering from ill health or an
accident? If so, how long should the Partner be incapacitated before the other Partners can
retire him?

5. 5 How much power should particular Partners have in running the offices? For instance, should
the particular Partner running an individual Office be entitled to hire and dismiss staff without
needing the consent of the other Partners? In what areas will the agreement of the other
Partners be necessary?

5. 6 How should disputes be resolved concerning, say the account of the Partnership? Should there
be provision for reference of such disputes to arbitration?

5. 7 Should there be provision for sick pay?

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