📝 Contract Template
Partnership Agreement Template
Business partnership terms: roles, profit sharing, exit clauses, dispute resolution.
What a partnership agreement has to decide
- Each partner’s capital contribution, and whether it is cash, assets or work
- The profit and loss split, and whether it matches the capital split
- Drawings: how much, how often, and what happens if the business cannot fund them
- Roles, decision-making authority, and which decisions need unanimity
- What happens when a partner wants to leave, becomes ill, or dies
- How a departing partner’s interest is valued, and over what period it is paid out
- Restraint on competing after departure, and for how long
- Dispute resolution — mediation before litigation, and who breaks a deadlock
General partners are jointly and severally liable
In an ordinary partnership, each partner can be liable for the whole of the partnership’s debts, not just their share — including debts another partner incurred. That is the single most consequential fact about the structure, and it is the reason many businesses that describe themselves as partnerships are actually companies or trusts. Decide the structure with an adviser before you paper the relationship.
- Understand what each partner is personally exposed to before signing
- Agree the exit valuation method now, while everyone is still friendly — it is unagreeable later
- Register the business name and settle the tax registrations that follow the structure you chose
The clauses people wish they had
- A deadlock mechanism for a two-partner business, where there is no majority
- A clause covering a partner who stops contributing but does not leave
- Insurance funding a buyout on death or disability, so the survivors are not buying from an estate with no cash
Related templates
General information only — not legal, tax or financial advice. For contracts and tax documents, confirm your obligations with a qualified professional or the relevant authority.