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Free Business Partnership Agreement Template

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Document and article by on December 5, 2023 Written by Easy Legal Docs Editorial Team

Entering into a business partnership is a major decision that can shape the trajectory of your venture. One of the key steps you should take to protect all parties involved is drafting a comprehensive Business Partnership Agreement. On EasyLegalDocs, you can easily download a free Business Partnership Agreement template to make this process more straightforward.

What is a Business Partnership Agreement?

A Business Partnership Agreement is a legally binding document that defines the framework within which the partnership will operate. This Agreement spells out everything from the purpose of the business to how profits and losses will be distributed, the roles of each partner, and the procedures for resolving disputes.

Why You Need a Business Partnership Agreement Template

In the absence of a clear Agreement, misunderstandings are likely to arise. A Business Partnership Agreement template is beneficial because it:

  1. Minimizes risk: Pre-emptively addresses possible business challenges.
  2. Sets expectations: Outlines responsibilities, contributions, and benefits.
  3. Legal protection: Provides a legal fallback in case of disputes.

How to Write a Business Partnership Agreement: A Step-By-Step Walkthrough

So, you’ve decided to download our Business Partnership Agreement template. Excellent choice! Now comes the critical part: customizing it to suit the unique requirements of your business. Let’s dive into a step-by-step walkthrough to help you get the most out of your Agreement.

Start with the Basics: Title and Introduction

Your Agreement should start with a title that explicitly states its purpose, such as “Business Partnership Agreement.” Following the title, introduce the parties involved as “Partner A” and “Partner B,” detailing their respective locations. These are the entities entering into the contract, collectively referred to as “the Partners.”

Define the Purpose of the Partnership

Be specific and clear about the partnership’s objectives and the types of business activities that will be carried out. This helps to set expectations and limits on what the partnership will focus on.

Specify the Duration

Clearly indicate the length of time the partnership will last. Whether it’s an indefinite period or fixed term, state it clearly to avoid future confusion.

Set the Business Location

Your Agreement should specify the principal place of business. This information is critical for legal and tax reasons. Remember, any change in location will require an amendment to the Agreement.

Discuss Capital Contributions

Identify the initial capital each partner will contribute. This can be in the form of money, property, or services. Be as detailed as possible to avoid disputes later on.

Define Distribution of Profits and Losses

Here, you’ll indicate how profits and losses will be distributed among the partners. This is often based on the ratio of capital contributions but can be adjusted as per mutual agreement.

Outline Management and Voting Procedures

Determine how decisions will be made within the partnership. Will each partner have an equal say, or will voting power be determined by the percentage of ownership? The Agreement should make this crystal clear.

Plan for the Unexpected: Death or Departure of a Partner

Life is unpredictable. Your Agreement should outline what will happen if a partner dies or wishes to exit the partnership. Whether the remaining partner has the right to buy out the other’s share or if the partnership will be dissolved, specify the procedure.

Dispute Resolution and Governing Law

Clearly indicate how conflicts will be resolved, whether through arbitration, mediation, or another method. Also, mention the laws of which jurisdiction will govern the Agreement.

Concluding the Agreement

To make the Agreement legally binding, it must be signed and dated by all parties involved. Each partner should also print their name for clarity.

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Document Sample

Business Partnership Agreement Template

Below you can see a sample of the Business Partnership Agreement template:

Template Business Partnership Agreement

Business Partnership Agreement FAQs

What is the primary purpose of a Business Partnership Agreement?

The primary purpose of a Business Partnership Agreement is to establish a legal framework that outlines the roles, responsibilities, financial contributions, and profit-sharing among the partners. It acts as a formal guideline for operating the business and serves as a point of reference in case of disputes.

Do I need a lawyer to draft a Business Partnership Agreement?

While it's possible to draft an Agreement without a lawyer, legal advice is strongly recommended. Our template provides a solid foundation, but a legal professional can help tailor the Agreement to suit the specific needs of your business.

Can the Business Partnership Agreement be amended?

Yes, the Agreement can be amended, but any changes must be in writing and signed by all partners. Usually, the Agreement itself will have a section detailing the process for amendments.

What should I include in the section about capital contributions?

In the capital contributions section, clearly specify what each partner is contributing to the business. This can be in the form of money, assets, or services. Also, indicate the valuation of each contribution, as this often dictates the distribution of profits and losses.

What are the guidelines for dispute resolution?

Disputes are subject to a chosen form of resolution like Arbitration, Mediation, or Negotiation, and are governed by the laws of a specified jurisdiction, as outlined in the "Dispute Resolution" and "Governing Law" sections.

Is this Business Partnership Agreement template customizable?

Yes, while the template covers most elements that standard partnerships might need, it can and should be customized to fit the specific needs of your venture.

What does the template say about adding new partners?

The "Admission of New Partners" section specifies that no new partners may be added without the unanimous consent of the existing Partners.

Does this template supersede previous agreements?

Yes, the "Entire Agreement" section makes it clear that this Agreement supersedes all prior understandings or agreements, whether they are oral or written.

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