Partnership Agreement - Template, Sample Form Pro · AU-law

PARTNERSHIP AGREEMENT

THIS PARTNERSHIP AGREEMENT ("this Agreement") is dated ________.

BETWEEN the following partners (referred to in this Agreement collectively as the "Partners" and individually as a "Partner"):

________ ________

of the following address:

________

AND

________ ________

of the following address:

________

BACKGROUND

The Partners intend to carry on a business together in partnership.

This Agreement sets out the terms and conditions that govern the relationship between the Partners, and each Partner agrees to be bound by the terms of this Agreement.

(1) PARTNERSHIP

(a) The Partners hereby agree to enter into a general partnership (the "Partnership") within the meaning of the Partnership Act applicable in the State or Territory specified in clause 1(b).

(b) The Partnership will be governed by the laws of ________ and, to the extent applicable, the relevant Partnership Act of that jurisdiction.

(c) This Agreement will be interpreted in accordance with the laws of ________, and the Partners agree to be subject to the laws of ________.

(2) NAME OF PARTNERSHIP

The Partnership will carry on business under the name: ________. The Partners will register and renew any business name as required under the Business Names Registration Act 2011 (Cth) and apply for an Australian Business Number where required. The Partnership's Australian Business Number (if any) is: ________.

(3) PURPOSE OF PARTNERSHIP

The Partnership is established for the following purpose:

________

(4) PRINCIPAL PLACE OF BUSINESS

The principal place of business of the Partnership will be ________, or such other location(s) as the Partners may determine from time to time.

(5) COMMENCEMENT DATE AND TERM

(a) The Partnership will commence on ________.

(b) The Partnership will continue until it is terminated by operation of law or in accordance with this Agreement.

(6) CAPITAL CONTRIBUTIONS

(a) The Partners listed below have each made an initial capital contribution in cash, property or services in the agreed amount (in Australian dollars) set out next to their respective names:

________: ________

________: ________

(b) Any further capital contributed to the Partnership will be clearly recorded in the Partnership's books, together with records of which Partner made each contribution.

(c) The capital of the Partnership will consist of all contributions of money or property which the Partners provide to the Partnership from time to time.

(d) All capital contributions are final unless all Partners give written consent to a withdrawal.

(7) INTEREST ON CAPITAL

No Partner will be entitled to any interest or other borrowing charge on capital contributed to the Partnership.

(8) CAPITAL WITHDRAWALS

Capital may only be withdrawn from the Partnership:

(a) in accordance with this Agreement;

(b) if all Partners provide their express written consent to such withdrawal; or

(c) as otherwise required by law.

(9) ADDITIONAL CAPITAL

(a) Capital contributions may be amended from time to time according to the requirements of the Partnership, provided that the interests of the Partners are not affected except with the unanimous consent of the Partners. No Partner will be required to make additional capital contributions. Where additional capital is determined to be required and an individual Partner is unwilling or unable to meet the additional contribution requirement within a reasonable period, the remaining Partners may contribute in proportion to their existing capital contributions to resolve the amount in default. In such case, the allocation of profits or losses among the Partners will be adjusted to reflect the aggregate change in capital contributions.

(b) Any advance of money to the Partnership by any Partner in excess of the amounts provided for in this Agreement, or subsequently agreed as an additional capital contribution, will be deemed a debt owed by the Partnership and not an increase in that Partner's capital contribution. Such a debt will be repaid with interest at rates and times determined by a majority of the Partners within the limits permitted by law, will not entitle the lending Partner to any increased share of profits or greater voting power, and may have priority over other payments to Partners as determined by a majority of the Partners.

(10) CAPITAL ACCOUNTS

An individual capital account ("Capital Account") will be maintained for each Partner, and each Partner's initial capital contribution will be credited to that account. Any additional capital contribution made by a Partner will be credited to that Partner's Capital Account.

(11) FINANCIAL DECISIONS

Decisions regarding the distribution of profits, allocation of losses, the requirement for additional capital contributions and all other financial matters will be decided by a unanimous vote of the Partners.

(12) OWNERSHIP INTEREST

The Partners' ownership interests in the Partnership will be as follows:

________: ________%

________: ________%

(13) PROFIT AND LOSS

(a) Subject to the other provisions of this Agreement, the net profits and losses of the Partnership, for both accounting and tax purposes, will accrue to and be borne by the Partners in proportion to their respective ownership interests (the "Profit and Loss Distribution").

(b) The profits and losses will be accounted for by an accountant appointed by the Partnership.

(c) The profits and losses will be distributed to the Partners using the Profit and Loss Distribution method at the intervals agreed by the Partners, namely ________, and paid on ________.

(d) Each Partner will be responsible for their own taxation liability on any distribution made, including any liability arising under the Income Tax Assessment Act 1997 (Cth) and the Income Tax Assessment Act 1936 (Cth). The Partnership will lodge a partnership income tax return as required.

(14) ACCOUNTING

(a) Accurate and complete books of account of the transactions of the Partnership will be kept in accordance with applicable Australian Accounting Standards and will at all reasonable times be available for inspection and examination by any Partner.

(b) Accounting records will be kept on an accrual basis.

(15) PARTNERSHIP ANNUAL REPORT

(a) As soon as reasonably practicable after the end of each financial year during the term of the Partnership, the Partnership will prepare an annual report (the "Annual Report"), which will include at a minimum:

(I) all information necessary for the preparation of each Partner's income or other tax returns;

(II) a copy of any tax returns filed on behalf of the Partnership for that financial year;

(III) supporting income statements;

(IV) a balance sheet;

(V) a cash flow statement;

(VI) a breakdown of the profit and loss attributable to each Partner; and

(VII) any additional information that one or more Partners may reasonably require.

(b) The Partnership will provide a copy of the Annual Report to each Partner.

(16) BANKING AND PARTNERSHIP FUNDS

The funds of the Partnership will be placed in such investments and banking accounts as the Partners designate. All withdrawals from those accounts will be made by the duly authorised agent or agents of the Partners as agreed by unanimous vote. Partnership funds will be held in the name of the Partnership and will not be commingled with those of any other person or entity.

(17) PARTNERSHIP FINANCIAL YEAR

The financial year of the Partnership will end on 30 June each year, unless otherwise required by law or agreed by the Partners.

(18) VOTING

In any vote required by the Partnership, each Partner will receive one vote carrying equal weight, unless this Agreement expressly provides otherwise.

(19) FINANCIAL REVIEW AND AUDIT

(a) All accounts relating to the Partnership, including contribution and distribution accounts, will be reviewed annually by an independent accountant who is not a Partner. The review will assess the accuracy of financial reporting and the fair allocation of profits and losses, and the results will be provided to all Partners within 30 days of completion.

(b) Any Partner will have the right to request an audit of the Partnership's books. The cost of the audit will be borne by the Partnership, and the audit will be performed by an accounting firm acceptable to all Partners.

(20) MANAGEMENT

(a) All Partners will be consulted, and the advice and opinions of the Partners will be obtained so far as is practicable. The Managing Partner will have management and control of the day-to-day business of the Partnership for the purposes stated in this Agreement. All matters outside the day-to-day business will be decided by unanimous vote of the Partners.

(b) The following Partner will serve as the Managing Partner: ________. The term "Managing Partner" includes any party subsequently appointed to that role.

(c) In addition to day-to-day management, the Managing Partner's duties include keeping, or causing to be kept, full and accurate business records in accordance with applicable Australian Accounting Standards, and overseeing the preparation of reports reasonably necessary to keep the Partners informed of the Partnership's business performance.

(d) A Managing Partner may voluntarily withdraw from the position or be replaced by unanimous vote of the remaining Partners. On withdrawal or removal, the remaining Partners will have equal rights in the management of the Partnership until a successor Managing Partner is appointed.

(e) The Managing Partner will not be liable to the remaining Partners for any action or failure to act resulting in loss or harm to the Partnership, except in the case of gross negligence or wilful misconduct.

(f) The Managing Partner is authorised to retain or enter into contracts with persons or firms as required in the management of the Partnership's business, including with sales companies, lawyers, accountants, brokers, advertising and insurance companies.

(21) CONTRACT BINDING AUTHORITY

Each Partner will have authority to bind the Partnership in contract, unless otherwise agreed in writing by the Partners. The Partners acknowledge that, under the relevant Partnership Act, each Partner is an agent of the Partnership for the purposes of the business of the Partnership.

(22) COMPENSATION FOR SERVICES PERFORMED

Partners may be compensated for services actually performed as may from time to time be agreed by unanimous vote of the Partners.

(23) MEETINGS

(a) Regular meetings of the Partners will be held at the intervals agreed by the Partners, namely ________.

(b) Any Partner may call a special meeting to resolve issues requiring a vote by providing all Partners with reasonable notice. A special meeting will be restricted to the specific purpose for which it was held.

(c) All meetings will be held at a time and place that is reasonable, convenient and practical for all Partners, and may be held by audio or video conference.

(24) ADMITTING A NEW PARTNER

(a) A new Partner may be admitted to the Partnership with the unanimous vote of the existing Partners.

(b) Any new Partner agrees to be bound by all covenants, terms and conditions of this Agreement, including current and future amendments, and will execute such documents as are needed to effect the admission. A new Partner will receive such interest in the Partnership as determined by unanimous decision of the other Partners.

(25) VOLUNTARY WITHDRAWAL OF A PARTNER

(a) Any Partner may voluntarily withdraw from the Partnership by providing ________ written notice to the remaining Partners.

(b) Except as otherwise provided in this Agreement, the voluntary withdrawal of a Partner will have no effect on the continuance of the Partnership business.

(c) Where the interest of a Partner (the "Dissociated Partner") is to be sold, the remaining Partners have a right of first purchase. If any remaining Partner elects to purchase the interest, that Partner will serve written notice of election upon the Dissociated Partner within thirty (30) days after receipt of the notice of intention to withdraw, including the purchase price, method and schedule of payment. The purchase amount will be determined under the Valuation of Interest clause of this Agreement.

(d) A Partner will exercise the right to withdraw only in good faith and will act to minimise present or future harm to the remaining Partners.

(26) INVOLUNTARY WITHDRAWAL OF A PARTNER

(a) Events resulting in involuntary withdrawal of a Partner include, but are not limited to: death; mental incapacity; disability preventing reasonable participation; breach of fiduciary duties; conviction of a serious criminal offence; expulsion; operation of law (including bankruptcy under the Bankruptcy Act 1966 (Cth) or external administration under the Corporations Act 2001 (Cth) where a Partner is a body corporate); or any act or omission that can reasonably be expected to bring the business or reputation of the Partnership into disrepute.

(b) Except as otherwise provided in this Agreement, the involuntary withdrawal of a Partner will have no effect on the continuance of the Partnership business.

(c) Where the interest of a Dissociated Partner is to be sold, the remaining Partners have a right of first purchase. If any remaining Partner elects to purchase, that Partner will serve written notice of election, including the purchase price, method and schedule of payment, upon the Dissociated Partner or their legal personal representative within a reasonable period after acquiring knowledge of the change in circumstance. The purchase amount will be determined under the Valuation of Interest clause.

(d) A trustee in bankruptcy or similar third party who acquires the Dissociated Partner's interest will acquire only that Partner's economic rights and interests and will not acquire any other rights, be admitted as a Partner, or exercise any management or voting interests.

(27) DISSOCIATION OF PARTNER

(a) Where the remaining Partners have purchased the interest of a Dissociated Partner, the purchase amount will be paid in full, without interest, within ________ of the date of withdrawal.

(b) The Partnership will retain exclusive rights to use the trade name, firm name and all related brand and model names of the Partnership.

(c) Where the withdrawal of a Partner results in only one Partner remaining, or where no buyer is found for the interest of the Dissociated Partner, the Partnership will proceed in a reasonable and timely manner to dissolve, with all debts paid first before any distribution of remaining funds. Valuation and distribution will be determined under the Valuation of Interest clause.

(d) On any purchase and sale of a Partnership interest, a Dissociated Partner will only have liability for Partnership obligations incurred during their time as a Partner. The Partnership will promptly prepare, file, serve and publish all notices required by law to protect the withdrawing Partner from liability for further Partnership obligations.

(e) The remaining Partners retain the right to seek damages from a Dissociated Partner where the dissociation resulted from a malicious or criminal act, a breach of fiduciary duty or breach of this Agreement, or conduct that could reasonably be foreseen to bring harm or damage to the Partnership or its reputation.

(28) DISSOLUTION

(a) Except as otherwise provided in this Agreement, the Partnership may be dissolved only with the unanimous consent of all Partners.

(b) On dissolution, each Partner will share in any remaining assets or liabilities of the Partnership in proportion to their ownership interests (the "Dissolution Distribution").

(c) On dissolution and liquidation, and after payment of all selling costs and expenses, the liquidator will distribute Partnership assets in the following order of priority:

(I) in satisfaction of liabilities to creditors, except Partnership obligations to current Partners;

(II) in satisfaction of Partnership debt obligations to current Partners; and then

(III) to the Partners according to the Dissolution Distribution.

(d) The claims of each priority group will be satisfied in full before satisfying any claims of a lower priority group. Any excess or insufficiency in Partnership assets will be shared by the Partners according to the Dissolution Distribution.

(29) VALUATION OF INTEREST

(a) In the absence of a written agreement setting a value, the value of the Partnership will be based on the fair market value appraisal of all Partnership assets (less liabilities) determined in accordance with applicable Australian Accounting Standards. The appraisal will be conducted by an independent accounting firm agreed by all Partners, appointed within a reasonable period of the date of withdrawal or dissolution, and the results will be binding on all Partners. A withdrawing Partner's interest will be based on that Partner's proportion of the Dissolution Distribution, less any outstanding liabilities owed to the Partnership.

(b) No allowance will be made for goodwill, trade name, patents or other intangible assets, except where those assets have been reflected in the Partnership books immediately prior to valuation.

(30) GOODWILL

The goodwill of the Partnership will be assessed at an amount determined by appraisal using applicable Australian Accounting Standards.

(31) TITLE TO PARTNERSHIP PROPERTY

Title to all Partnership property will remain in the name of the Partnership. No Partner or group of Partners will have any ownership interest in such property in whole or in part otherwise than as a Partner.

(32) FORCE MAJEURE

A Partner will be relieved of liability to the Partnership where prevented from performing their obligations under this Agreement, in whole or in part, due to force majeure, such as earthquake, flood, fire, pandemic, war or any other unforeseen and uncontrollable event, provided that the Partner has communicated the circumstances to all other Partners and taken all appropriate action to mitigate the event.

(33) DUTY OF LOYALTY

(a) No Partner will engage in any business, venture or transaction, directly or indirectly, that might be competitive with or in conflict of interest to the business of the Partnership without the unanimous written consent of the remaining Partners.

(b) Each Partner must fully disclose to all other Partners any business, venture or transaction having any appearance of conflict of interest.

(c) A failure to comply with this clause will be deemed an involuntary withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.

(d) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(34) DUTY TO BE CANDID

(a) Each Partner agrees to be candid and faithful to all other Partners and to provide all other Partners with all relevant information relating to the Partnership.

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(35) DUTY TO ASSIST BUSINESS

(a) Each Partner agrees to provide all other Partners with all necessary assistance in carrying on the Partnership's business for the mutual benefit of all Partners.

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(36) DUTY OF ACCOUNTABILITY FOR PRIVATE PROFITS

(a) Each Partner must account to the Partnership for any benefit derived without the consent of the other Partners from any transaction concerning the Partnership, or from any use of the Partnership property, name or business connection. This duty continues to apply to any transactions undertaken after the Partnership has been dissolved but before its affairs have been completely wound up.

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(37) DUTY TO DEVOTE TIME

(a) Each Partner will devote such time and attention to the business of the Partnership as the majority of the Partners may from time to time reasonably determine.

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(38) DUTY TO PAY PRIVATE DEBTS

(a) Each Partner must punctually pay and discharge all of their own private debts when due.

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(39) DUTY TO DEPOSIT PARTNERSHIP MONEY

(a) Where a Partner receives money on behalf of the Partnership, that Partner must immediately deposit it with the Partnership (for example, into the Partnership's nominated bank or investment account).

(b) Each Partner indemnifies and keeps indemnified each other Partner in respect of any and all losses, damage, costs, expenses and liabilities arising from a breach of this clause.

(40) FORBIDDEN ACTS

Lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat duis aute irure dolor in reprehenderit voluptate velit esse cillum dolore eu fugiat nulla pariatur lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris.

(41) INDEMNIFICATION

All Partners will be indemnified and held harmless by the Partnership from and against any and all claims of any nature arising out of a Partner's participation in Partnership affairs. A Partner will not be entitled to indemnification for liability arising out of the gross negligence or wilful misconduct of that Partner, or the breach by that Partner of any provision of this Agreement.

(42) LIABILITY

A Partner will not be liable to the Partnership or to any other Partner for any error in judgment, or any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement, except as otherwise provided by law.

(43) DISPUTE RESOLUTION

(a) In the event of any dispute, claim, question or disagreement arising from or relating to this Agreement or its breach, the Partners will use their best efforts to settle it, consulting and negotiating in good faith to reach a just and equitable solution satisfactory to all Partners.

(b) If the Partners are unable to reach a resolution within a reasonable period, they agree first to attempt to resolve the dispute through mediation administered by a mediator agreed between them or, failing agreement, nominated by the President of the Law Society of ________ (or their nominee).

(c) If the dispute cannot be resolved through mediation, the Partners agree to submit the dispute to arbitration conducted in accordance with the Commercial Arbitration Act applicable in ________. The decision of the arbitrator will be final and binding upon all Partners.

(d) The costs of any mediation or arbitration will be borne equally by the Partners unless the mediator or arbitrator determines otherwise.

(e) Nothing in this clause prevents a Partner from seeking urgent interlocutory or injunctive relief from a court of competent jurisdiction.

(44) LIFE INSURANCE

The Partnership may acquire life insurance on the lives of any or all of the Partners where deemed necessary by the Partnership. Each Partner will cooperate fully in obtaining any such policies.

(45) JURISDICTION

The Partners submit to the non-exclusive jurisdiction of the courts of ________ for the enforcement of this Agreement or any arbitration award or decision arising from it.

(46) WAIVER

(a) The waiver by any Party of any right or remedy in relation to a breach, default, delay or omission by another Party will not be construed as a waiver of any subsequent breach of the same or other provisions of this Agreement.

(b) The failure or delay by any Party in exercising any right or remedy under this Agreement will not constitute a waiver of that right or remedy, nor prevent that Party from subsequently exercising it.

(c) Any rights or remedies provided in this Agreement are cumulative and in addition to any rights or remedies provided by law.

(47) CURRENCY

Any amounts of money described in this Agreement are in Australian dollars unless specifically stated otherwise.

(48) GOODS AND SERVICES TAX

Unless otherwise stated, all amounts referred to in this Agreement are exclusive of any Goods and Services Tax (GST) that may be payable. Where GST is payable on any supply made under or in connection with this Agreement, the amount payable for that supply will be increased by the amount of GST applicable, and that GST will be paid at the same time and in the same manner as the consideration for the supply, in accordance with the A New Tax System (Goods and Services Tax) Act 1999 (Cth). A Party making a taxable supply must provide a valid tax invoice.

(49) MISCELLANEOUS

(a) Time is of the essence in this Agreement.

(b) This Agreement may be executed in counterparts, including by electronic signature in accordance with the Electronic Transactions Act applicable in the relevant jurisdiction.

(c) If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, this Agreement will be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the rest of the Agreement, valid and enforceable. If a court declines to amend this Agreement as provided, the invalidity or unenforceability of any provision will not affect the validity or enforceability of the remaining terms, which will be enforced as if the offending provision had not been included.

(d) This Agreement contains the entire agreement between the Parties and supersedes all prior negotiations, representations and understandings, whether written or oral. Only the written terms of this Agreement will bind the Parties.

(e) This Agreement is binding upon and enures for the benefit of each Partner's successors, assigns, executors, administrators, beneficiaries and representatives.

(f) This Agreement may not be amended in whole or in part without the unanimous written consent of all Partners.

(g) All rights, remedies and benefits provided by this Agreement are cumulative and not exclusive of any other rights, remedies or benefits allowed by law.

(h) Any notice to be given under this Agreement must be in writing and sent by prepaid post or email to the address or email address of the relevant Party set out at the head of this Agreement, or as otherwise notified. A notice sent by prepaid post will be deemed received 3 business days after posting, and a notice sent by email will be deemed received at the time of transmission, unless the sender receives an automated delivery failure notification.

(50) INTERPRETATION

In this Agreement, unless the context otherwise requires:

Lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat duis aute irure dolor in reprehenderit voluptate velit esse cillum dolore eu fugiat nulla pariatur lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua ut enim ad minim veniam quis nostrud exercitation ullamco laboris.

(51) DEFINITIONS

In this Agreement, the following definitions apply:

"Agreement" means this partnership agreement.

"Annual Report" in respect of a particular financial year refers to the annual report of the Partnership, created in accordance with the "Partnership Annual Report" clause of this Agreement.

"Capital Account" in relation to a Partner means an individual capital account into which that Partner's initial capital contribution, and any additional capital contributions made by that Partner, are credited.

"Capital Contribution" refers to the contribution of capital, whether in cash, property, goods or services, that each Partner provides to the Partnership.

"Dissolution Distribution" means the manner in which any assets or liabilities of the Partnership are distributed between the Partners upon dissolution, as described in the "Dissolution" clause of this Agreement.

"Goods and Services Tax" or "GST" means Goods and Services Tax imposed on a supply of goods or services in Australia pursuant to the A New Tax System (Goods and Services Tax) Act 1999 (Cth) or any other applicable law.

"Managing Partner" means the Partner appointed to that position in accordance with the "Management" clause of this Agreement, or any person subsequently appointed to that role.

"Partner" refers individually to each of the partners named in this Agreement.

"Partners" refers to any two or more of the partners named in this Agreement.

"Partnership" refers to the partnership created under this Agreement.

"Profit and Loss Distribution" means the method by which profits and losses of the Partnership are distributed between the Partners, as described in the "Profit and Loss" clause of this Agreement.

EXECUTED AS AN AGREEMENT this ________.

Executed by ________ in accordance with s127 of the Corporations Act 2001 (Cth) by:

_____________________________
Signature of director

_____________________________
Name of director

_____________________________
Signature of director/secretary

_____________________________
Name of director/secretary

[Where the first Partner is an individual, executed by:]

_____________________________
Signature of ________

_____________________________
Signature of witness

_____________________________
Name of witness

Executed by ________ in accordance with s127 of the Corporations Act 2001 (Cth) by:

_____________________________
Signature of director

_____________________________
Name of director

_____________________________
Signature of director/secretary

_____________________________
Name of director/secretary

[Where the second Partner is an individual, executed by:]

_____________________________
Signature of ________

_____________________________
Signature of witness

_____________________________
Name of witness