The Partnership Act 1890 applies to partnerships where there is no written partnership agreement. The Partnership Act is not suitable for all partnerships and you may wish for your partnership to be subject to different rights/obligations.
You may also wish for your partnership to be subject to different levels of profit/capital distribution than is provided for in the Partnership Act. If this is the case, a partnership agreement may be suitable for your business.
Partnership agreements can address a range of issues, including:
- decision making;
- profits/capital distribution; and
- procedures and mechanisms for dissolving the partnership.
Importance of Partnership Agreements
Providing written evidence of what has been agreed between the partners can reduce the potential for costly litigation fees if disagreements arise.
At Rotheras we understand that creating a partnership agreement might not be your main priority when going into business with other partners. That said, we suggest that partnership agreements are drafted at the earliest stage possible. The following factors typically need to be taken into consideration when drawing up a legal partnership agreement:
- how long will the agreement last for?;
- how will business assets be divided and used?;
- how much capital should be provided by each partner?; and
- what percentage of profit and loss is each partner responsible for?.
Why use Rotheras to draw up your Partnership Agreement?
If you already have a partnership agreement, we can review this and update it, or we can draft a new agreement for you to reflect any changes in your business.
We have a wealth of experience in drafting partnership agreements, whether you’ve recently entered into a partnership or have a well-established business and whether your business consists of two partners or numerous partners.
Our Commercial Litigation department can advise on any disputes that may arise between partners.
We will act swiftly and efficiently, keeping you updated on progress at all times.
We will work with you to listen to what you want to achieve from your partnership agreement.
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Posted on 02/22/2021