Partnership Agreement (Long Form)This Partnership Agreement (Long Form) outlines the distribution of income or losses incurred by the business amongst the involved parties, as well as the terms in which the business is to operate upon.
Partnership Agreements are essential in establishing, as well as safeguarding, the respective obligations and rights of parties involved within a partnership. This Partnership Agreement (Long Form) outlines the distribution of income or losses incurred by the business amongst the involved parties, as well as the terms in which the business is to operate upon. It also includes clauses related to the resolution of any disputes that may arise throughout the duration of the partnership in providing the terms that were originally agreed upon.
Use this Partnership Agreement (Long Form) if:
- You are entering into a partnership and you would like to establish and clearly communicate the foundational terms and rights of the partnership to the other parties involved.
What does the Partnership Agreement (Long Form) cover?
- Partnership name and business address;
- Names of the partners;
- Effective date of agreement, and commencement of Partnership;
- Participation in the management of the Partnership’s business;
- Duties and limitations of each partner;
- Sharing of capital and property;
- Distribution of profit or losses amongst partners;
- Salaries of partners;
- Operation of partner’s shares;
- Procedures and rules governing the dissolution of the Partnership;
- Terms concerning retirement, death, or expulsion of a partner; and
- Procedures for resolving disputes.
- Cumulative rights
Other names for Partnership Agreement include:
- Partnership Contract;
- Deed of Partnership Agreement;
What is the difference between a Partnership Agreement and Joint Venture Agreement?
The main differences between a Partnership Agreement and a Joint Venture Agreement is the kind of parties involved, the goal of the agreement and the distribution of profit and losses. To begin with, a Joint Venture Agreement is an agreement that governs the relationship between two or more companies in a joint venture. A Joint Venture Agreement is typically created between two or more companies who have agreed to enter into a contractual arrangement to undertake a specific project together, whereas a Partnership Agreement is between two or more individuals. Unlike a Partnership Agreement, in a Joint Venture Agreement, each party of the agreement is responsible for the individual debts they have incurred throughout the course of the arrangement as each party retains its separate identity. However, similar to that of a Partnership, the profits of the joint venture are distributed amongst the parties.
Do I need a Partnership Agreement to start a business with a partnership structure?
In short, a Partnership Agreement is not necessarily needed to form an official partnership. However, it is good practice to create a written Partnership Agreement to protect the individual interests and rights of the parties involved as well as to set out their obligations to avoid overall confusion or disagreement. This is because, in the event of a dispute or the dissolution of the partnership, the Partnership Agreement will operate as a safeguard in protecting and providing proof as to the interests and rights of each party.
How long is a Partnership Agreement effective for?
Partnership Agreements can either operate indefinitely or within a specified time period. The duration of a Partnership Agreement is dependent on the terms outlined within the agreement. In order to leave a Partnership Agreement, it is essential that you or the other party abide by and follow the procedures outlined in the agreement itself. Furthermore, a Partnership Agreement can also come to an end in the event of death, bankruptcy, a partner longer being able to legally own a business or a court issued court order.
What laws are applicable to a Partnership Agreement?
Depending upon which state or territory the Partnership Agreement was made in, various pieces of legislation will apply. For instance, in the case of a New South Wales based partnership, the Partnership Act (1892) will apply; however, if the partnership was based in Victoria, a different act will apply, being the Partnership Act (1958). Additionally, Australian Contract Law will also apply to Partnership Agreements in clarifying and implying terms into the contract.
How do the laws for Partnership Agreements vary between states?
As discussed previously, each state and territory has its own law that governs Partnership Agreements. Although such legislation may vary from state to state or territory, there are general regulations that apply to the structure of Partnership Agreements regardless of what state the agreement was made in. In expanding your partnership on an interstate level, it is important to be wary and educated on the differences of the different pieces of Partnership Agreement legislation and how they may impact yourself or your partners. To this end, in order to fully understand such differences, it is important that you hire a lawyer who will be able to explain these differences and how they will impact your Partnership Agreement/s in other states. It is beneficial to hire a lawyer, as they will be able to inform you of these changes and effectively implement for you and your company.
How can a Partnership Agreement be terminated?
In order to dissolve a Partnership Agreement, a partner usually will give written notice to all the other partners making known their intention. Typically there will be a notice period dictated by the Partnership Agreement that has been agreed upon by both parties.
In the case of bankruptcy or death of a partner, the partnership ends from the date of bankruptcy or death. A partnership can also be terminated in the case of illegal conduct within the partnership. In some instances, a partner may need to apply for a court order to remove a partner.
What can I do if there’s a breach of a Partnership Agreement?
The best thing you can do is get in contact with a lawyer. Seeking legal advice as soon as possible is one of the most important things to do when a breach of a Partnership Agreement occurs. Whether your agreement is in contract form or not, a lawyer will be able to help you in whatever the instance may be.