What is a Partnership?

A partnership is entered into when two or more people (partners) enter into business together with a vision to make profit. Both (or all of the) partners share the responsibilities, benefits and risks involved in running the business.

Partnerships can be formed using verbal agreements, which usually occur when friends enter into partnerships with each other; however, in these cases the law assumes everything is shared equally, from profits to losses. As a result, when complications arise, it can be difficult for the partners to reach agreement and maintain their relationship.

Partnerships are best governed a partnership agreement that clearly states the obligations and rights of each partner.

Some matters that a well drafted will partnership will address include are:

  • The nature of the partnership business
  • How and in what amounts capital is to be contributed to the partnership
  • The duties of the partners
  • How major decisions are to be voted on
  • How profit is to be distributed
  • How remuneration to partners will occur
  • The role of any inactive partner
  • The method for introducing new partners
  • The mechanism for when a partner wants to exit or must exit, including determining the value of a partner’s share
  • Restraints of trade for outgoing partners
  • Dispute resolution
  • Termination of a partnership and winding up.

How Can We Help You?

We are experienced partnership agreement lawyers and we can assist in the drafting, negotiation or review of a partnership agreement.

We appreciate that no two businesses are the same. A well drafted and properly considered partnership agreement will usually prevent costly disputes later.

Call us now on 1300 907 335 or fill out the contact form on this page and we will respond to you promptly.

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