business partnership

 

PARTNERSHIP AGREEMENTS

How to form business partnerships using RP Emery's Business Partnership Agreements.

If two or more people decide to enter business together, a business partnership may well be the ideal solution. However, it is not a step to be taken lightly. Be it with friends, family or a new business acquaintance (you may not know so well) a Business Partnership Agreement provides a legally recognised business entity. All parties decide together what terms they will work under and then all enter into the Business Partnership agreement. This agreement is a legally binding instrument and protects all parties to the agreement.

There are some basic questions to consider before you begin:

Forming a partnership can be done verbally or in writing. Partnerships are a legally binding business entity and impose certain duties and obligations on its partnership members. As such, you should always be sure of the people with whom you choose to form the Partnership. It’s one thing to be friends with a person, it’s quite another to form a business partnership with them.

Put simply, a partnership is an agreement between 2 or more people who want to work together. It maybe for profit or another reason. If you enter a partnership agreement with someone to do business and make a profit, you may automatically form a partnership without being aware of it. Whenever you choose to do business with other people, you should first set out the terms of the partnership. Ideally this would be done in writing by using a Business Partnership Agreement. You don’t want an assumption, that went unsaid, to be misunderstood and come back and haunt you later.

Yes and no. Whilst there is much leeway in drafting Business Partnership Agreements, some areas are determined by law. Partners can agree to share or delegate responsibilities, how they will share profits and losses, what hours they work etc. However certain provisions of the agreement are governed by law.

Creating the Partnership Agreement is the most important step you’ll take when entering a partnership. You’ll need to make sure you have as much information in the agreement, as possible, so none of the partners are left confused or unsure as to their rights and responsibilities. Partnership Agreements need to clearly state the purpose for which they are formed, the name of the business, the partners involved, the length the Partnership is intended to last, and much more. Partners need to be able to rely on one another. They also need a clear understanding as to how the business is going to operate. Leaving a Partnership Agreement silent on an important matter is the surest way to see your partnership end in less than happy circumstances.

Your Partnership Agreement should cover all contingencies. This includes what happens when one or more people want to leave the business. If you’ve entered a Partnership Agreement with other people who now want to sell the business, but you want to continue the business, your Partnership Agreement must be clear as to how this is resolved. Partnerships often have partners who have differing interests and wishes. Nothing causes more problems than a Partnership Agreement that is silent about how to handle these differences.

Starting a new business can be a fun and exciting time. However, it can also be a stressful and difficult time. If you’ve decided to form a partnership with others, you owe it both to yourself and to them to make your Partnership Agreement as precise and clear as possible.

If you've decided to enter into a Business Partnership agreement, RP Emery's comprehensive partnership agreement has been drafted by Australian lawyers and is written in a clear and easy to understand English.

PARTNERSHIP AGREEMENT: MORE INFORMATION


BUSINESS PARTNERSHIP AGREEMENT KIT

Our Business Partnership Agreements Kit offers far more information and every document and contract you will need to form your Business Partnership! You be the judge, please see;

BUSINESS PARTNERSHIP AGREEMENT KIT: MORE INFORMATION