How to Write a Partnership Agreement

Before you enter into a partnership, iron out the details to prevent unexpected obstacles.

Things You'll Need

• Business Week
• Attorney Referral Services
• Financial Manager
• Personal Financial Software

Instructions

1. Meet with all the prospective partners. Plan to spend several hours discussing the points in the agreement.

2. Discuss how profits will be split, how much each partner will participate in the management of the business, what will happen if any partners decide to leave the partnership, how assets will be distributed if the partnership dissolves and the procedure for adding, expelling or buying out partners.

3. Write down the points once you all reach agreement.

4. Make the document legally binding by having an attorney draw up the final draft.

5. Sign the document and distribute copies to each partner.

Tips & Warnings

• In the partnership agreement, specify how the value of assets will be appraised to avoid hassle, wrangling and animosity later.

• Though a written partnership agreement is not necessary for a general partnership, it is a good idea.

• Pick business partners who share your values and goals.