Partnership Agreements: An Outline What is it? Partnership agreements are essentially guidelines to give business partners clarity and purpose in their dealings with each other. Each partnership is different, so each agreement will uniquely reflect that. What does it set out? The agreement sets out the rights and obligations of the partners, their investments in the business, who owns what property in the partnership and how the profits will be shared. It also regulates how decisions are made. Is there any need for a partnership agreement? A written agreement is ideal if they are to reflect important elements of the partnership, particularly if they are involving friends and family, or indeed parties who have got together with a common interest. An agreement enables partners the chance to head off any potential legal actions later down the line. If there is no agreement, then the Partnership Act 1890 will apply and that may be unsuitable for the parties. The ins and outs of an agreement A written partnership agreement will set out such things as to what the rules of the partnership will be, the nature of the business, what happens if a partner wishes to join or leave, the financial elements of the partnership, what happens if a partner dies, how the partnership may dissolve or brought to an end, how a partner can be brought out. How many partners can sign? Following law changes, thereis no maximum on the number of partners signing an agreement.
Partnership termination An agreement should also set out what the dissolution of a partnership means and who is liable to the other partners in terms of money borrowed, leases or contracts pertaining to the business agreement. Risks Without an agreement in place, partners could very quickly quit, set up as a competitor, forcing you to lose even more business, while you are still trying to cope with the stress and fallout of the partnership ending. Inevitably, partners in business will lead to addressing an agreement sooner rather than later, and they should seek the advice of a solicitor as to what the agreement entails and the personal risks of not taking one out for the benefit of the partners and the business. A partnership agreement is essentially an insurance policy which will negate the need for partners to seek legal redress if everything is set out beforehand. At Nath Solicitors, we are experienced at drafting bespoke Partnership agreements tailored to match our client’s intentions and requirements. For further information, please contact us today. Read More...
Contact Details:Reach us @ www.nathsolicitors.co.uk For any query you can call us on Tel: +44(0) 203 670 5540 Mob:+44 (0) 7545 813 894 E-mail: shubha@nathsolicitors.co.uk