Partnership agreement
- Provides greater flexibility compared to default partnership rules
- Reduces the risk of disputes between the partners
- Customisable to your business partnership
Use this Partnership agreement template if you want to start a business partnership between two or more individuals.
It's a good idea to have a written partnership agreement in place if you want to start a partnership because it provides rules around how your partnership will be run. For example, the Partnership agreement template allows you to decide matters like:
- how new partners are appointed;
- how profits and losses are shared;
- the partners' duties and responsibilities;
- how partners may retire or be expelled from the partnership; and
- the obligations of the partners not to compete against the partnership.
By using a Partnership agreement, you reduce the risk of disputes with your partners in future and you are also given greater flexibility to run your partnership as you wish (if you do not have a partnership agreement in place, the default rules of partnership law apply).
You can find a blog summarising what a partnership agreement is and how to use it here.
Q&A
When should I use this document?
You should use this Partnership agreement if you wish to start a partnership between two or more individuals. This Partnership agreement template is not appropriate if one or more partners will be a company or you wish to set up an LLP.
What does this document cover?
This Partnership agreement allows you to set various rules and policies about how your partnership will run. It includes terms around:
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the start date, name and duration of your partnership;
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how the capital account, accounts and banking will be run;
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drawings and sharing profits and losses;
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how new partners can join the partnership including a template deed of adherence;
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leave arrangements, management duties and liabilities of partners;
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non-compete provisions;
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how partners may retire or can be expelled;
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how the partnership may end and/or how changes to the agreement may be made;
and more.
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Why do I need this document?
Customising this template Partnership agreement to your business partnership allows you to:
- set rules and policies around how the partnership will be run;
- reduce the risk of future disputes between the partners by ensuring terms of the partnership are clear from the outset; and
- have greater flexibility and control over your partnership compared to the rules under default partnership law (which apply if you do not have a partnership agreement in place).
Where can I find out more?
You can find out more about partnerships and how to use this Partnership agreement in Partnerships.
You can find a blog summarising what a partnership agreement is and how to use it here.
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