Basic Partnership Agreement
Partnerships are one of the most common business structures in the UK. A partnership is a set of relations between parties carrying on a business in common with a view to profit. The relationship between the parties can be express or implied, written, or unwritten. A partnership is not a separate legal entity and so it is a matter of fact whether a partnership exists. Partners will generally have unlimited liability.
Partnerships are governed in the UK by the Partnership Act 1890 and where there is no express agreement (whether written or oral), the Partnership Act 1890 will imply certain terms into a partnership. It is, however, advisable to have a written agreement in place.
The basic short form partnership agreement has this month been updated and refreshed. It covers all the main areas that customers need to document a business partnership, but in a basic form. It includes the name and premises to be used by the business, the commencement date as well as each partner’s initial capital contribution and how the partners and partnership will operate. Considering the recent and ongoing emphasis on environmental, social and governance (ESG) matters, an additional ESG requirement has also been added. The Partnership Checklist also been updated to reflect the relevant changes made.
This template will be suitable for most forms of straightforward partnership arrangement. This template anticipates several individuals and might be used, for example, where two or three people set up a small business partnership together.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.