Basic Partnership Agreement Template
This Basic Partnership Agreement is a simple, short form legal document which covers the key issues arising in a straightforward partnership arrangement. This template anticipates only a few individual partners and might be used, for example, where two or three people set up a small business together.
A partnership does not have a separate legal personality and is governed by the Partnership Act 1890, which legislates for how a partnership will operate and is regulated. In practice much of this will not be practical or applicable for a modern business. It should therefore be superseded by a properly drafted partnership agreement to cover all the areas of concern to the partners. Note, however, that case law states that a contractual agreement is not the essence of a partnership, as it is a continuing personal as well as commercial relationship.
This agreement provides for equal capital contributions, and the equal sharing of profits and losses. It anticipates that all the partners will work full time in the business, and that they will manage the business jointly. It does not anticipate any additional employees. This template can be adjusted to suit the requirements of the partnership in question. An additional requirement on the Partners to consider environmental, social and governance (ESG) matters has also been included.
Tax matters have not been considered in this agreement; however, the general rule is that tax is payable by each partner and not the partnership itself.
For a more sophisticated partnership structure, where more partners are involved, where there is a possibility of the business taking on employees and where a Managing Partner is to be appointed, the Long Partnership Agreement may be more appropriate.
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