Long Form Partnership Agreement
The Partnership Act 1890 still forms the basis of current partnership law. Partnerships are a set of relations between parties carrying on business with a view to profit. These relations can be express or implied, written or unwritten. It is advisable to have a relatively comprehensive partnership agreement in place between the partners. This type of agreement is useful to set out the financial and operation parameters within which the partnership will operate and avoid potential disputes once the partnership is up and running.
This Long Form Partnership Agreement is a comprehensive agreement that deals with the establishment of a partnership structure. The Agreement will take you through the formation of the partnership and its place of business and deals clearly and concisely with capital, profits and losses, and drawings. It covers practical and administrative issues such as accounts and banking, insurance and holidays and clearly sets out the duties of the partners; how the partnership will be managed and how new partners enter the partnership and outgoing partners, retire, leave or are expelled.
This document anticipates a simple arrangement of 2 or 3 partners who have equal shares in a business.
If you are looking for something simpler, please refer to our Basic Partnership Agreement .
Note that like a sole trader, a partnership has no legal personality. Partnerships offer a flexible business model without the administrative and regulatory demands of a limited liability company. However, in a business partnership, you’re running a business as a self-employed individual but with the other partners. You share responsibility for the business jointly and you will not have limited liability as a limited company has. Our informationpages give greater detail which customers may find useful.
This Long Form Partnership Agreement contains the following clauses:
1. Definitions and Interpretations
2. Formation and Name
3. Commencement and Duration
4. Place of Business
6. Partnership Property
7. Profits, Losses and Salaries
9. Auditors, Accounts and Records
10. Bank Account
13. Salaried Partners
14. Obligations of Partners
15. Management and Decisions
16. Life Assurance
19. Voluntary Retirement
20. Involuntary Retirement
22. Outgoing Partners
23. Restriction on Activities
25. Entire Agreement
26. Arbitration and Disputes
27. Applicable Law and Jurisdiction
Schedule 1 - Profit Share and Monthly Drawings
Schedule 2 - Initial Capital
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
This agreement is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.
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