A Basic Partnership Agreement is a concise, legal document that addresses the most important concerns that arise in a straightforward partnership arrangement. Specifically, it anticipates that all of the partners would work full-time in the firm and that they will collaborate to operate the company. The precise details can vary from agreement to agreement and in this article, Basic Partnership Agreement, we take a look at the process involved and the options available to you.
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For a free initial discussion on how we can help you deal with the legal implications of setting up a basic partnership agreement, get in touch with us today. We are experienced in dealing with all forms of corporate negotiations and we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
What Key Points Should Be Included In The Agreement?
Although each partnership agreement differs based on business objectives, certain terms should be detailed in the document. These include:
Capital Contributions
Your partnership agreement should clearly state the contributions that each partner will make to the partnership as well as the percentage of ownership interest that each member will hold in the partnership. Cash is the most common type of contribution, although other assets such as property, stocks, and assets, as well as certain talents, can all be considered legal company contributions.
Liabilities
The type of partnership you sign into will determine whether or not each partner will be held personally accountable for the partnership’s business debts and responsibilities. The fact that this can expose the members’ personal assets if their company becomes overextended and insolvent is an important consideration when creating a partnership.
Distribution Of Profit And Losses
Profits and losses are shared and assigned among participants. Profit and loss allocation and distribution that is proportionate to each partner’s ownership share is a popular method of allocating and distributing earnings and losses among partners. Partner’s agreements should also indicate whether each partner will be permitted to make an annual “draw” — that is, a withdrawal from his or her allocated earnings — or whether each partner will be permitted to withdraw the entirety of his or her assigned profits. This will be determined by the financial requirements of the partners.
Responsibilities Of The Partners
When it comes to partnerships, one of its disadvantages is the possibility of ambiguous authority. Therefore, a significant portion of your partnership agreement must detail the responsibilities of each partner. This involves defining each partner’s level of authority, corporate decision-making ability, significant management tasks (as opposed to minor management responsibilities), as well as any other obligations.
How To Deal With Disputes
Dispute resolution is the resolution of a disagreement. As is common in most company enterprises, you can anticipate having at least one heated debate with your business partners at some point. Include a clause in your agreement that specifies how deadlocked issues will be resolved if they cannot be resolved through negotiation. Instead of partners proceeding directly to court in the event of a disagreement, you may want to consider that arbitration or mediation be employed first.
How we can help
We have a proven track-record of dealing with Basic Partnership Agreements. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Corporate Solicitors
It is important for you to be well informed about the issues and possible implications of a Basic Partnership Agreement. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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