A business partnership agreement is a contract between partners in a partnership which sets out the terms and conditions of the relationship between the partners, including: percentages of ownership, distribution of profits and losses and a description of management powers and duties of each partner.<\/p>\n\n\n\n
Entering into a business partnership can come with conflicts and misunderstandings between you and your new partner or partners.<\/p>\n\n\n\n
Having a written agreement that clearly outlines your rights and responsibilities is important for maintaining a healthy business relationship between partners. Some areas may seem simple or irrelevant to a business agreement, but it can be beneficial to include smaller points to avoid issues in the future. Here are some key areas to include in your partnership agreement:<\/p>\n\n\n\n
Name of partnership:<\/strong> agree on a name for your business.<\/p>\n\n\n\n Contributions to the partnership:<\/strong> work out and record how much each person initially contributes to the business, whether it\u2019s cash, property, or services, and decide what percentage each owner will have.<\/p>\n\n\n\n Admitting new partners: <\/strong>agree on a procedure for admitting new partners so that you can equally decide on a new person.<\/p>\n\n\n\n Distribution of profits\/allocation of losses:<\/strong> decide how profits and losses are allocated to partner shares.<\/p>\n\n\n\n Partnership decision-making:<\/strong> to avoid conflict when it comes to making unanimous or individual decisions, set up a decision making process that everyone is happy with.<\/p>\n\n\n\n Death, disability, or withdrawal:<\/strong> if a member of the partnership wants to withdraw from it, or is forced to due to death or disability, then a buy\/sell agreement is needed to manage the situation. Consider who you trust to make decisions on your behalf, who would inherit the shares of your company etc.<\/p>\n\n\n\n Resolving disputes:<\/strong> to deal with situations where you and your partners can\u2019t agree on something, set up a mediation clause where everyone can agree on a procedure to resolve major conflicts.<\/p>\n\n\n\n Management duties: <\/strong>work out some guidelines on how the business will be managed. This can include who is responsible for dealing with customers, supervise employees, manage bookkeeping, negotiate with suppliers, etc.<\/p>\n\n\n\n Partner time off: <\/strong> work out how leave will work, including paid and unpaid sick leave, vacations, annual leave etc.<\/p>\n\n\n\n Non-competition clause: <\/strong>if you\u2019re concerned about a partner leaving and then competing with the partnership\u2019s business, you can include a clause that restricts them from doing so within a defined time period.<\/p>\n","protected":false},"excerpt":{"rendered":" A business partnership agreement is a contract between partners in a partnership which sets out the terms and conditions of the relationship between the partners, including: percentages of ownership, distribution of profits and losses and a description of management powers and duties of each partner. Entering into a business partnership can come with conflicts and…<\/p>\n","protected":false},"author":1114,"featured_media":1095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[34,35,33],"yoast_head":"\n