Create comprehensive partnership agreements that define roles, responsibilities, profit sharing, and dispute resolution. Generate professional partnership contracts in minutes.
Create Your AgreementProfessional Partnership Agreement Template (.docx) with LexDraft branding
A partnership agreement is a legal contract between two or more individuals who agree to operate a business together and share profits and losses. It establishes the partnership structure, defines each partner's roles and responsibilities, specifies capital contributions, determines profit and loss distribution, outlines management procedures, and provides for dispute resolution and exit strategies.
Partnership agreements protect all partners by clarifying expectations, preventing misunderstandings, defining decision-making authority, and establishing procedures for handling disagreements. Without a written agreement, partners face unlimited personal liability.
Specify the official name of the partnership, the business address, the nature of the business, and the principal business purpose. Include the effective date of the partnership.
List all partners' names, addresses, and identification. Specify each partner's capital contribution (cash, property, services) and ownership percentage. Define when contributions are due.
Define each partner's role, responsibilities, and authority. Specify who manages day-to-day operations, financial decisions, hiring, and client relationships. Clarify decision-making authority.
Specify how profits and losses are distributed among partners. This can be equal distribution, based on ownership percentages, or other arrangements. Address how distributions are calculated and paid.
Establish decision-making procedures. Specify what decisions require unanimous consent, majority vote, or can be made by individual partners. Define voting rights for each partner.
Define procedures if a partner wants to withdraw from the partnership. Specify what happens to their interest, buyout procedures, and pricing. Include provisions for partner death or disability.
Define procedures for admitting new partners, including partner approval requirements, capital contribution expectations, and how ownership interests are adjusted.
Include procedures for resolving disputes between partners, such as mediation or arbitration. Define the process for addressing deadlocks and decision-making disagreements.
Include confidentiality provisions protecting partnership information. Include non-competition and non-solicitation clauses preventing partners from competing with the partnership or soliciting clients and employees.
Open LexDraft in Word and provide partnership details: names of all partners, business name, business purpose, partnership structure, and effective date.
Define each partner's capital contributions, ownership percentages, roles and responsibilities, profit/loss distribution, and compensation arrangements.
LexDraft generates your complete partnership agreement. Review all terms, customize as needed, and prepare for signature by all partners.
Never operate a partnership without a written agreement. Verbal agreements are unenforceable and lead to disputes. A written agreement clarifies expectations, defines rights and responsibilities, and protects all partners.
Specify exactly what each partner contributes to the partnership (cash, property, services, equipment). Define the value assigned to non-cash contributions. This prevents disputes about ownership percentages and fairness.
Establish clear decision-making procedures. Specify which decisions require unanimous consent, which need majority approval, and which can be made by individuals. This prevents deadlocks and disagreements.
Be explicit about how profits and losses are distributed. This doesn't have to match ownership percentages. Different arrangements are possible. Avoid ambiguity that leads to disputes.
Define what happens if a partner wants to leave. Include buyout procedures, valuation methods, and terms for selling their interest. This prevents disputes when partnerships dissolve.
Include arbitration or mediation procedures for handling disagreements. This avoids costly litigation if disputes arise. Include procedures for handling deadlocks or irreconcilable differences.
Consider whether a general partnership (unlimited personal liability) is appropriate. Limited partnerships and LLCs offer liability protection. Consult a tax professional about the best structure.
Have an attorney review your partnership agreement before signing. Partnership law varies by jurisdiction. An attorney can ensure the agreement is compliant and protects all partners' interests.
In a general partnership (GP), all partners share liability and management responsibilities. All partners are personally liable for business debts and obligations. In a limited partnership (LP), limited partners have liability limited to their investment but cannot manage the business. General partners in an LP have unlimited liability. Most partnerships are now structured as LLCs to provide liability protection for all members while maintaining flexibility.
Yes, profit-sharing doesn't have to match ownership percentages. Partners can agree to different arrangements based on contributions, effort, or roles. For example, a partner might own 50% but receive only 30% of profits. Any arrangement is possible as long as all partners agree. This should be explicitly documented in the partnership agreement to avoid disputes.
This is defined in your partnership agreement. Common procedures include buyout arrangements, valuation methods for the departing partner's interest, and terms for selling to remaining partners. Without clear provisions, disputes easily arise. Include withdrawal provisions addressing notice requirements, asset valuation, and payment terms. Consider buy-sell agreements or life insurance to fund buyouts.
Yes, but all existing partners must agree. The partnership agreement should include procedures for admitting new partners, including approval requirements and capital contribution expectations. Adding a new partner typically requires amending the partnership agreement and potentially restructuring ownership percentages and profit distributions.
Partnership agreements bind all partners who sign them. New partners who join later must sign the agreement (or an amended version) to be bound by its terms. This ensures that all partners agree to the same rules and procedures. Never assume a new partner automatically accepts the original agreement—have them sign.
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