How to Form a Business Partnership Contract in California
Partnership contracts are often written, but oral agreements and handshakes may establish a legally enforceable business partnership contract in California.
A business partnership contract is enforceable in California any time two or more people agree to co-ownership of a business for profit. In California, enforceable partnership contracts involve finding business partners, communicating the terms of a partnership, and mutually accepting the terms of the agreement.
Some partners draft an optional, written partnership agreement that supersedes a prior non-written contract, and clarifies the relationship and expectations among the partners.
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Instructions
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Find one or more people that agree to conduct a business enterprise with you for profit. A potential partner may be an existing associate, friend, or family member.
Consider looking for business partners online using websites like Businessparters.com, Partnerup.com or Partnerbinder.com. Industry trade shows and conventions are also good places to strike up relationships with potential partners.
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Communicate the terms of a partnership agreement that indicate co-ownership of the business to a prospective partner. The communication may be written or oral. Upon mutually accepting the terms of the agreement, a legally enforceable general business partnership contract is formed. For example, you may say,"Let's start an event photography business together," and a prospective partner replies,"Okay, let's do it." Then, you confirm with, "Okay." This communication is sufficient to form a business partnership contract in California.
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Create a written partnership contract that supersedes a prior non-written contract. Written contracts are recommended to avoid problems that arise from unclear expectations. Written partnership contracts are optiona, and California law does not require them for a general partnership.
The written contract should include each partner's contribution, ability to control the businesses, and role or title. Include statements about handling disputes between the partners and rules that apply to a partner's withdrawal or dissolution of the business.
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Tips & Warnings
Most terms of liability are only enforceable in a written partnership contract. Unless otherwise stated in a written contract, each partner is personally liable for the debts and obligations of the business and the debts and obligations of each of the other partners in a California general partnership.
Submit a fictitious business name statement (sometimes called a DBA or "Doing Business As" statement) with a county clerk in the California county the business operates in, if the business name is not the first and last name of each partner.
Register your business with the Department of State of California for your business to hold assets separately from the individual partners.
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