Kaufman & Forman, P.C.
Call to arrange a consultation
678-957-7769 | 800-461-5864
Contact Us
practice areas

What every partnership agreement should include

One of the most import decisions when starting a business is determining the right structure. The right choice can mean the difference between a business's success and failure. Partnerships are the best option for many, but there are some important issues to consider and clauses that can be included to help to create a strong and binding partnership agreement. These spell out each partner's responsibilities, legal liabilities and financial obligations. While some states require the partnership agreement to be filed along with the business formation documents, Georgia is not one of them. Nonetheless, it is an important agreement that every partnership needs even when everyone is well intentioned and honest.

5 clauses that should be included

Each partnership's circumstances are different, but these agreements should generally include such clauses as:

  1. Capital contributions: The agreement should clearly outline what each partner contributes (money, sweat equity/skills, property, etc.) and how that ties to the percentage of ownership.
  2. Duties: It is important to spell out each partner's duties, including the decision-making authority, management authority and any other important responsibilities.
  3. Sharing profits: This is generally tied to the percentage of ownership and will spell out how much the partners will draw or pay themselves.
  4. Liabilities: Not all partners may be equally liable for business obligations, and some may wish to protect personal assets if the business becomes insolvent and indebted.
  5. Dispute resolution: Not all partnerships go smoothly and some will have growing pains, so it is best to have a plan that outlines how disagreements are to be resolved (ideally using mediation or arbitration instead of going to court).

Each agreement should address the partnership's needs

A standard fill-in-the-blanks partnership agreement can be found on the internet, but these are a classic example of "you get what you pay for." Considering the potential for reward and risk, it is wise to make sure that partnership addresses the needs of all parties by consulting an attorney with experience drafting partnership agreements and other business documents.

No Comments

Leave a comment
Comment Information

Contact Kaufman & Forman, P.C. Now

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

get Legal Help Now

Kaufman & Forman, P.C.
8215 Roswell Road
Building 800
Atlanta, GA 30350

Toll Free: 800-461-5864
Phone: 678-957-7769
Fax: 770-395-6720
Atlanta Law Office Map

Review Us

Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.