Long Form Partnership Agreement
Long Form Partnership Agreement is a comprehensive agreement for establishing and running a partnership. It is designed to help the partners agree the financial and operational parameters within which the partnership will operate, and to reduce the scope for disputes once the business is up and running.
The Partnership Act 1890 still forms the basis of partnership law. Partnerships are a set of relations between parties carrying on business with a view to profit. Those relations can be express or implied, and written or unwritten. A written partnership agreement is often advisable so that the partners’ commercial deal is clearly recorded.
What does Long Form Partnership Agreement do?
It sets out a detailed framework for the formation and operation of the partnership, including how the business is managed, how the partners’ financial arrangements work, and how partner changes are handled.
What does Long Form Partnership Agreement cover?
It covers matters including:
- formation of the partnership and its place of business
- capital, profits and losses, and drawings
- accounts and banking, insurance and holidays
- duties of the partners and how the partnership is managed
- admitting new partners
- outgoing partners, including retirement, leaving and expulsion
This document anticipates a simple arrangement of 2 or 3 partners who have equal shares in a business.
When should you use Long Form Partnership Agreement?
Use it where you want a relatively comprehensive written agreement for a partnership business, particularly where the partners want fuller terms than a basic short-form agreement.
How Long Form Partnership Agreement is set out
The agreement includes clauses covering topics such as definitions, formation and name, capital, partnership property, profits and losses, drawings, accounts and records, banking, insurance, holidays, partner obligations, management and decisions, retirement and expulsion, dispute resolution, and governing law. It also includes schedules for profit share and drawings and for initial capital.
Optional phrases and clauses are enclosed in square brackets. These should be read carefully and selected so that they are compatible with one another. Unused options should be removed from the document.
What else you may need
If you are looking for something simpler, refer to our Basic Partnership Agreement.
Like a sole trader, a partnership has no legal personality and does not give the partners limited liability in the way a limited company does. Our information pages give more detail.
Long Form Partnership Agreement is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.