What is a Business Partnership Agreement ?
it is nothing more than when two or more people agree on a mutual interest that is designed to enhance such interest.
Partnerships present special challenges to the concerned parties. These concerns must eventually become an agreement. There must be a definitive understanding of the goals, the responsibilities of each party, the line of authority and the succession. Over and above these basics, the agreement must define how success or failure is measured and under what laws the agreement will written to. More often than not, a partnership agreement, if well written, is enforceable under civil law.
Let’s have a quick look at the elements of a small business partnership agreement.
- The name of the business.
- The term of the agreement
- The capital to be employed
- Profit and Loss provision
- Salaries and withdrawals
- Management duties and any restrictions
- Banking
- The books
- Voluntary termination
- Death
- Arbitration
Based on these sub sections, let’s have a look at a sample business partnership agreement. Bear in mind, this is only a pro-forma agreement and is in no way to be construed s complete or all encompassing
OK, let’s have a look at this free business partnership agreement template:
Although each and every clause is important, you will notice that the funding, the distribution of profit and the management are by far the most important. These are issues that must be thrashed out from the beginning. When you enter into a small business partnership agreement, you must do so with a common desire to succeed, not fail. Yes, the more mundane clauses are important, but not as important as the traditional gentleman’s agreement, a hand shake and a pledge to what has to be done to assure success.
If you are looking for a free business partnership agreement or a free business partnership agreement template, look no further than the internet. The internet contains a wealth of information on these subjects. Although there are many sites which give examples of free agreements, may I suggest the following?
Although there are many more examples of an on-line business partnership agreement template, in my opinion these are presenting the agreement in the most understandable fashion.
You need an agreement for sure, but to tell you the truth, a business partnership agreement works best when the partners are dedicated to success, not legal documents.
