A partnership agreement is a contract between two or more people who run a business together. It sets out what each partner contributes, how profits and losses are split, who makes decisions and what happens if a partner leaves. New business owners sign one before they open, and existing partners use one when they bring in a new partner.
Below are 26 free partnership agreement templates, all editable. They include a general partnership agreement, a business partnership agreement, a real estate partnership agreement and a school partnership agreement for joint programs. Each can be adapted as a partnership contract template for your own business.
Agree on a buy-out formula now, while everyone gets along. A partner leaving is the moment most partnerships fall apart, and a set formula avoids a fight over value. Partnership law varies by location, so have a lawyer review the final draft.
Partners often need more than one legal document. You may also need our founders agreement templates for startups, board resolution templates to record decisions, and confidentiality agreement templates to protect business information.
Practical Partnership Agreement Templates
Formal Partnership Agreement Template
Partnership Agreement Form Template
School’s Partnership Agreement Template
Extensive Partnership Agreement Template
Business Partnership Agreement Template
General Partnership Agreement Template
Sample Partnership Agreement Template
Real Estate Partnership Agreement Template
Cooperative Partnership Agreement Template
Exclusive Partnership Agreement Template
Typical Partnership Agreement Template
Example Partnership Agreement Template
Approprite Partnership Agreement Template
Routine Partnership Agreement Template
Important Elements of a Partnership Agreement Template
While drafting a partnership agreement template, following important elements must be present in it:
1. Name:
First, the partners should decide, by mutual understanding and consent, the name under which they want to register their partnership business.
2. Capital Contribution:
The partnership agreement template must properly state the amount of capital each partner agreed to contribute to the partnership business. The amount of capital must be written next to the name of each partner.
3. Share in profit or loss:
The partnership agreement should state the partners’ profit sharing ratio. The partners can, by mutual agreement, share the profits in any way they like. A share in profit also means a share in loss, but by mutual agreement of all the partners, some partners can be exempted from contributing to any loss of the business, which is a separate issue.
4. Authority of Partners:
The authority of each partner should be clearly stated in the partnership agreement. It must also make clear whether a partner requires the permission of the other partners before entering into a transaction on behalf of the firm.
5. Rights and Responsibilities of Partners:
The partnership agreement should clearly state the rights, duties, liabilities and responsibilities of all the partners. There must be no confusion between the partners about their rights and duties.
6. Admission of New Partners:
The partnership agreement should clearly state how any new partner or partners will be admitted to the existing partnership business.
7. Death or Withdrawal of Partners:
The partnership agreement must also make clear what to do in case of death or withdrawal of a partner or partners.
8. Resolving the issues:
During the partnership, partners may have many conflicts or issues. So, the partnership agreement should explain how the partners will resolve such issues or conflicts among themselves.
Effective Partnership Agreement Templates
Usual Partnership Agreement Template
Internal Partnership Agreement Template
Legal Services Partnership Agreement Template
Details of Partnership Agreement Template
Sample Partnership Deed Template
Partnership Agreement Format
Detailed Partnership Agreement Template
Standard Partnership Agreement Template
Agency Partnership Agreement Template
Limited Partnership Agreement Template
Typical Partnership Agreement Template
Exclusive Partnership Agreement Template
Benefits of having a Partnership Agreement
A partnership agreement is important for a various number of reasons. Some of these reasons are:
- The most important benefit of a partnership agreement is that it avoids many legal issues.
- When the partners know their rights and responsibilities, they are likely to focus more on the growth and development of the business.
- A partnership agreement can be adjusted or amended whenever it needs to change. This makes it easy to deal with changes or developments.
- In the presence of a partnership agreement, disputes or conflicts can be dealt with in an easier way.
- Any new partner or partners are admitted properly and in accordance with the terms and guidelines of the partnership agreement. Certain conditions or requirements must be fulfilled to be admitted to the existing partnership business.
- With a partnership agreement in place, the rights and liabilities of a partner withdrawing from the partnership, or of a deceased partner, can be easily measured.
Working Through a Partnership Agreement
Choose a structure that fits the actual business relationship and obtain local legal and tax advice before signing. A partnership agreement should explain decisions and responsibilities as well as ownership percentages.
- Record the partners, business purpose and agreed contributions, including when they are due.
- Describe authority, decisions, profit and loss allocation and access to records.
- Agree how changes, disputes, exits and winding up will be handled.
Worked Example
Example: two partners contribute different amounts but agree to share specified operating duties. The agreement should state whether profit shares follow capital contributions, work commitments or another agreed basis. A 60/40 contribution ratio does not by itself answer who can sign a lease or approve a large purchase.
Common Mistakes to Avoid
Avoid using ownership, management authority and profit entitlement interchangeably. Do not leave departure or deadlock arrangements to be worked out only after a disagreement occurs.
Related Templates
- Founders Agreement Templates
- Cohabitation Agreement Templates
- Board Resolution Templates
- Letter of Intent to Purchase Property Templates
Frequently Asked Questions
Must profits follow the contribution ratio?
That depends on the agreement and applicable rules. State the intended allocation clearly and obtain advice on its legal and tax treatment instead of assuming it follows capital automatically.
What should happen when a new partner joins?
Use the admission process and approvals agreed by the partners. Document updated contributions, rights and responsibilities so the new arrangement does not conflict with the existing agreement.
