Standard Business Partnership Agreement
Although a business attorney best conveys the legal implications of a partnership agreement, the partners determine standard elements in the agreement. These factors are distinctive for each partnership when drafted into a partnership agreement.
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Who
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Standard sections of a partnership agreement include the business name, the purpose of the partnership, the names of the partners and the amount of capital contributed by each partner. The agreement specifies maintaining a separate capital account for each partner in the partnership's accounting.
How
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Every partnership agreement contains sections that address the percentages of profit participation and management rights of each partner. Often there are general statements about the contribution of time by each partner to the partnership---usually in proportion to their ownership percentages or capital contributions. The partnership agreement may guarantee or prohibit compensation to partners.
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Termination
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Partnership interests usually terminate upon death, disability or voluntary action of a partner. Upon death or permanent disability of a partner, the remaining partners are customarily granted a right to purchase the partnership interest of the departed partner. The price for executing these rights is specified in the partnership agreement as a formula, independent valuation procedure or negotiation method.
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