What is Partnership Agreement?
Partnership Agreement Defines terms for business partnerships, including profit-sharing and decision-making arrangements.
This Partnership Agreement ("Agreement") is entered into as of [Date] by and between Jane Doe and John Doe, individually referred to as "Partner" and collectively as "Partners," regarding their Doe & Doe Inc., under the laws of the United States.
1. Formation of Partnership
The Partners hereby form a general partnership ("Partnership") under the name "Doe & Doe Inc." for the purpose of carrying on the business agreed upon herein.
The purpose of the Partnership shall be to engage in any lawful act or activity related to the business of the Partners, as may be agreed upon by the Partners from time to time.
The Partnership shall commence on the date of this Agreement and shall continue until terminated in accordance with the provisions of this Agreement or by operation of law.
2. Capital Contributions
2.1. Initial Contributions
Jane Doe shall contribute cash in the amount of $[Amount] and John Doe shall contribute cash in the amount of $[Amount] as their initial capital contributions. Each Partner's contribution shall be credited to their respective capital accounts.
2.2. Additional Contributions
Any additional contributions to the Partnership's capital shall be mutually agreed upon in writing by the Partners. Additional contributions shall also be credited to the Partners' respective capital accounts.
3. Profit and Loss Allocations
3.1. Sharing of Profits and Losses
Net profits and losses of the Partnership shall be allocated to the Partners in proportion to their respective capital account balances at the end of each fiscal year or other agreed-upon accounting period.
Each Partner may withdraw, upon written notice to the other Partner, a portion of their share of the profits as agreed upon by the Partners, subject to the provisions of this Agreement and the limitations imposed by law.
4. Management and Authority
4.1. General Management
The business and affairs of the Partnership shall be managed by both Partners. Each Partner shall have equal authority to conduct the ordinary course of the Partnership's business, including the execution of contracts and other legal instruments, unless otherwise agreed in writing by both Partners.
4.2. Major Decisions
Major decisions affecting the Partnership, including but not limited to the admission of new partners, dissolution, merger, or sale of substantially all of the Partnership's assets, shall require the unanimous written consent of both Partners.
4.3. Dispute Resolution
In the event of a disagreement between the Partners concerning the Partnership's business, the Partners agree to resolve such disagreement through mediation, arbitration, or other mutually agreed-upon dispute resolution method.
5. Books and Records
The Partnership shall maintain accurate books and records reflecting the Partnership's financial transactions, capital accounts, and other business affairs. The books and records shall be maintained at the Partnership's principal place of business and shall be available for inspection by any Partner at any reasonable time.
5.2. Fiscal Year and Accounting
The Partnership's fiscal year shall be the calendar year. The Partnership's books and records shall be maintained, and financial statements prepared, on an accrual basis according to generally accepted accounting principles.
6.1. Events of Termination
The Partnership may be terminated upon the occurrence of any of the following events:
(a) The death, incapacity, bankruptcy, or expulsion of a Partner;
(b) The unanimous written consent of the Partners;
(c) The entry of a court order dissolving the Partnership under applicable law; or
(d) Any other event causing the dissolution of the Partnership under applicable law.
6.2. Dissolution and Liquidation
Upon termination of the Partnership, the Partnership shall be dissolved and its assets shall be liquidated, and the proceeds thereof distributed in the following order of priority: (a) to creditors of the Partnership, (b) to the Partners in proportion to their respective capital account balances, after adjusting for allocations of profits and losses upon dissolution.
7. Governing Law
This Agreement shall be governed by, and construed in accordance with, the laws of the United States, without regard to its conflicts of law principles.
This Agreement may be amended only in writing and signed by both Partners.
9. Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same Agreement. Electronic and facsimile signatures shall be deemed original signatures for all purposes.
IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first above written.
Common Sections of a Partnership Agreement
In this Partnership Agreement, you will see the following sections:
- Formation of Partnership
- Capital Contributions
- Profit and Loss Allocations
- Management and Authority
- Books and Records
- Governing Law
- Counterparts; Electronic Signatures
Analysis/Summary of each section
- Formation of Partnership : This section establishes the partnership between Jane Doe and John Doe under the name "Doe & Doe Inc." It outlines the purpose of the partnership, which is to engage in any lawful act or activity related to the business, and states that the partnership will continue until it is terminated according to the agreement or by law.
- Capital Contributions : This section details the initial capital contributions made by each partner, with Jane Doe contributing a specific amount and John Doe contributing another amount. It also explains that any additional contributions must be agreed upon in writing by both partners and will be credited to their respective capital accounts.
- Profit and Loss Allocations : This section explains how the partnership's net profits and losses will be allocated to the partners based on their capital account balances. It also states that each partner may withdraw a portion of their share of the profits, subject to the agreement's provisions and legal limitations.
- Management and Authority : This section states that both partners will manage the partnership's business and affairs, with each partner having equal authority to conduct the partnership's ordinary course of business. Major decisions, such as admitting new partners or dissolving the partnership, require unanimous written consent from both partners. In case of disagreements, the partners agree to resolve disputes through mediation, arbitration, or another mutually agreed-upon method.
- Books and Records : This section requires the partnership to maintain accurate books and records of its financial transactions, capital accounts, and other business affairs. These records must be kept at the partnership's principal place of business and be available for inspection by any partner. The partnership's fiscal year and accounting methods are also specified.
- Termination : This section outlines the events that can lead to the termination of the partnership, such as the death or bankruptcy of a partner, unanimous written consent of the partners, a court order dissolving the partnership, or any other event causing dissolution under applicable law. Upon termination, the partnership's assets will be liquidated and distributed according to a specified order of priority.
- Governing Law : This section states that the agreement will be governed by and construed according to the laws of the United States, without regard to its conflicts of law principles.
- Amendment : This section explains that the agreement can only be amended in writing and with the signatures of both partners.
- Counterparts; Electronic Signatures : This section allows the agreement to be executed in counterparts, meaning each partner can sign a separate copy, and all copies together will constitute the complete agreement. Electronic and facsimile signatures are considered valid and original for all purposes.