Updated Partnership Agreement
Partnerships are still a very popular way for businesses to operate in the UK. A partnership will be implied by the law when two or more people are in a business relationship together with the view to making a profit. A partnership can offer much greater flexibility and privacy than a limited company, but like a sole trader, greater potential rewards have to be balanced against the potentially greater personal risks of setting up in partnership, most particularly personally covering any losses the business makes. As a partnership has no legal personality and the overarching legislation governing partnerships is the now slightly outdated Partnership Act 1890, it is advisable to have a comprehensive agreement in place between the partners.
This month we have updated our Long Form Partnership Agreement. The drafting has been significantly refreshed with the use of more definitions and plain English drafting to make the template more streamlined and less cumbersome. The template now has a more modern feel to it. The template includes the partnership’s formation and name, commencement and duration as well as capital contributions, drawings, profit share, exit provisions, dissolution and administrative matters.
We also have a lot of free information for customers on the pros, cons and mechanics of forming a business partnership. Our information pages can be accessed here.
This updated template will be of interest to all those customers looking to form a partnership or review and update the terms on which their current partnership operates.
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.