Partnership Agreement - Template, Sample Form Online Pro · US-law
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GENERAL PARTNERSHIP AGREEMENT
State of ________
This General Partnership Agreement (this "Agreement") is made and entered into as of ________ (the "Effective Date"), by and among the following persons (each a "Partner" and collectively, the "Partners"):
________, an individual/entity having an address at:
________
and
________, an individual/entity having an address at:
________
RECITALS
A. The Partners desire to associate themselves as partners in a general partnership for the conduct of business and the mutual benefit of the Partners.
B. The Partners desire to set forth the terms and conditions governing the formation, operation, governance, and dissolution of the Partnership.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:
ARTICLE I. FORMATION.
1. The Partners hereby form a general partnership (the "Partnership") under and pursuant to the laws of the State of ________, including the Uniform Partnership Act or Revised Uniform Partnership Act as adopted and in effect in such State (the "Act"). The rights, duties, and obligations of the Partners shall be governed by the Act, except as otherwise expressly provided in this Agreement, and to the extent permitted by the Act this Agreement shall control.
ARTICLE II. NAME.
2. The business of the Partnership shall be conducted under the firm name: ________. The Partnership shall file any assumed name, fictitious name, or "doing business as" registration required under applicable law.
ARTICLE III. PURPOSE.
3. The purpose of the Partnership shall be the following, together with any lawful act or activity incidental or related thereto:
________
ARTICLE IV. TERM.
4. The Partnership shall commence on the Effective Date and shall continue until dissolved and terminated in accordance with this Agreement or applicable law.
ARTICLE V. PRINCIPAL PLACE OF BUSINESS.
5. The principal office of the Partnership shall be located at the following address, or at such other place or places as the Partners may from time to time designate:
________
6. The registered agent of the Partnership for service of process, where required, shall be ________, located at ________.
ARTICLE VI. CAPITAL CONTRIBUTIONS.
7. Each Partner has contributed, or shall contribute, to the capital of the Partnership in cash, property, or services at agreed value, as follows (each a "Capital Contribution"):
a. ________ — $________ (________)
b. ________ — $________ (________)
8. All Capital Contributions shall be made in full and on time, no later than ________.
9. No Partner shall withdraw any portion of its Capital Contribution except with the prior written consent of all Partners.
ARTICLE VII. ADDITIONAL CAPITAL.
ARTICLE VIII. CAPITAL ACCOUNTS.
12. A separate capital account (each a "Capital Account") shall be maintained for each Partner and shall be credited with such Partner's initial and any additional Capital Contributions, and increased or decreased in accordance with applicable provisions of the Internal Revenue Code and Treasury Regulations, including Treasury Regulation \\u00a7 1.704-1(b).
ARTICLE IX. INTEREST ON CAPITAL.
13. No interest shall accrue or be payable to any Partner on such Partner's Capital Contribution, including any agreed additional Capital Contribution.
ARTICLE X. FINANCIAL DECISIONS.
14. Decisions concerning the distribution of profits, allocation of losses, the requirement of additional Capital Contributions, and all other financial matters shall be decided by unanimous vote of the Partners.
ARTICLE XI. OWNERSHIP INTERESTS.
15. The Partners' ownership interests in the Partnership shall be as follows:
a. ________ — ________% (________ percent)
b. ________ — ________% (________ percent)
ARTICLE XII. PROFITS AND LOSSES.
16. Subject to the other provisions of this Agreement, the net profits and net losses of the Partnership, for both accounting and federal income tax purposes, shall be allocated among the Partners in proportion to their respective ownership interests set forth above (the "Profit and Loss Distribution").
17. The profits and losses of the Partnership shall be accounted for by an accountant designated by the Partners.
18. Distributions of profits shall be made in accordance with the Profit and Loss Distribution at such intervals as the Partners may determine, and in any event no less frequently than ________.
19. Each Partner shall be solely responsible for all taxes payable by such Partner with respect to any allocation or distribution made under this Agreement.
ARTICLE XIII. VOTING.
20. In any vote required under this Agreement, each Partner shall be entitled to one vote of equal weight, unless otherwise expressly provided herein.
ARTICLE XIV. BOOKS AND RECORDS.
21. Accurate and complete books of account of the transactions of the Partnership shall be maintained in accordance with generally accepted accounting principles (GAAP) and shall at all reasonable times be open to inspection and examination by any Partner.
22. The accounting records of the Partnership shall be kept on an accrual basis.
ARTICLE XV. ANNUAL REPORT.
23. As soon as practicable after the close of each fiscal year, the Partnership shall furnish to each Partner an annual report showing a full and complete account of the condition of the Partnership, including at least the following:
a. all information necessary for the preparation of each Partner's income or other tax returns;
b. a copy of the Partnership's federal income tax return (IRS Form 1065) and accompanying Schedules K-1 for that fiscal year;
c. supporting income statements;
d. a balance sheet;
e. a cash flow statement;
f. a breakdown of the profit and loss attributable to each Partner; and
g. any additional information that the Partners may reasonably require.
ARTICLE XVI. BANKING AND PARTNERSHIP FUNDS.
24. The funds of the Partnership shall be deposited in such investments and bank accounts as the Partners shall designate. All withdrawals from such accounts shall be made only by the duly authorized agent or agents of the Partnership as agreed by the Partners. Partnership funds shall be held in the name of the Partnership and shall not be commingled with the funds of any other person or entity.
ARTICLE XVII. FISCAL YEAR.
25. The fiscal year of the Partnership shall end on the following date each year: ________.
ARTICLE XVIII. AUDIT.
26. Any Partner shall have the right to request an audit of the books and records of the Partnership. The cost of such audit shall be borne by the Partnership, and the audit shall be performed by an accounting firm acceptable to all the Partners.
ARTICLE XIX. MANAGEMENT.
27. The Partners shall be consulted and their advice and opinions obtained as far as practicable. The Managing Partner shall 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 of the Partnership shall be decided by unanimous vote of the Partners.
28. The following Partner shall serve as the Managing Partner: ________. The term "Managing Partner" shall include any person subsequently appointed to that role.
29. In addition to day-to-day management, the Managing Partner shall keep, or cause to be kept, full and accurate books and records in accordance with GAAP and shall oversee the preparation of reports reasonably necessary to keep the Partners informed of the Partnership's performance.
30. The Managing Partner may voluntarily withdraw from such role or may be replaced by unanimous vote of the remaining Partners. Upon any such withdrawal or removal, the remaining Partners shall have equal rights in the management of the Partnership unless and until they appoint a successor Managing Partner.
31. The Managing Partner shall 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 willful misconduct.
32. The Managing Partner is authorized to retain or enter into contracts with such persons or firms as may from time to time be required in the management of the Partnership's business, including, without limitation, sales companies, attorneys, accountants, brokers, advertising, and insurance companies.
ARTICLE XX. CONTRACT AUTHORITY.
33. Only the Managing Partner shall have the authority to bind the Partnership in contract; provided, however, that the Partners acknowledge that under the Act each Partner may be an agent of the Partnership as to third parties, and any limitation on authority hereunder shall be effective against third parties only to the extent permitted by the Act, including the filing of any applicable statement of partnership authority.
ARTICLE XXI. COMPENSATION FOR SERVICES.
34. A Partner may be compensated for services actually rendered as agreed from time to time by unanimous vote of the Partners.
ARTICLE XXII. TAX MATTERS / PARTNERSHIP REPRESENTATIVE.
35. The following Partner shall serve as the "partnership representative" within the meaning of Section 6223 of the Internal Revenue Code (as amended by the Bipartisan Budget Act of 2015) and the regulations thereunder: ________. The partnership representative shall prepare, or cause to be prepared, all tax returns and reports for the Partnership and shall make any related elections that the Partners deem advisable, including any election under Section 6221(b) or Section 6226 of the Internal Revenue Code where available.
36. The partnership representative may voluntarily resign, or may be appointed or replaced by majority vote of the other Partners. Upon any withdrawal of the partnership representative, the remaining Partners shall appoint a successor as soon as practicable.
ARTICLE XXIII. MEETINGS.
37. Regular meetings of the Partners shall be held at such intervals as the Partners may determine, and in any event no less frequently than ________.
38. Any Partner may call a special meeting to resolve issues requiring a vote under this Agreement by providing all Partners with reasonable notice. A special meeting shall be restricted to the specific purpose for which it was called.
39. All meetings shall be held at a time and place that is reasonable, convenient, and practical, considering the circumstances of all Partners, and may be held by telephone, video conference, or other electronic means.
ARTICLE XXIV. ADMISSION OF NEW PARTNERS.
40. A new Partner may be admitted to the Partnership only with the unanimous vote of the existing Partners.
41. Each new Partner shall agree in writing to be bound by all covenants, terms, and conditions of this Agreement, including all current and future amendments, and shall execute such documents as are needed to effect the admission. Each new Partner shall receive such interest in the Partnership as determined by unanimous decision of the other Partners.
ARTICLE XXV. VOLUNTARY WITHDRAWAL OF A PARTNER.
42. Any Partner shall have the right to voluntarily withdraw (dissociate) from the Partnership at any time. Written notice of intention to withdraw must be served upon the remaining Partners at least ________ prior to the withdrawal date.
43. A withdrawing Partner shall exercise the right to withdraw in good faith and shall act to minimize any present or future harm to the remaining Partners and the Partnership.
44. Upon the voluntary withdrawal of a Partner, the remaining Partners may elect, by unanimous vote, to continue the business of the Partnership and to purchase the dissociated Partner's interest in accordance with the Valuation of Interest and Payments provisions below; otherwise, the Partnership shall be dissolved and wound up in accordance with this Agreement and the Act.
ARTICLE XXVI. INVOLUNTARY WITHDRAWAL OF A PARTNER.
45. Events resulting in the involuntary withdrawal (dissociation) of a Partner shall include, but not be limited to: the death of a Partner; the mental incapacity, disability, or incompetence of a Partner preventing reasonable participation in the Partnership; breach of fiduciary duty by a Partner; criminal conviction of a Partner; expulsion of a Partner by unanimous vote of the other Partners; bankruptcy or operation of law against a Partner; or any act or omission of a Partner that can reasonably be expected to bring the business or reputation of the Partnership into disrepute.
46. Upon the involuntary withdrawal of a Partner, the remaining Partners may elect, by unanimous vote, to continue the business of the Partnership and purchase the dissociated Partner's interest in accordance with the Valuation of Interest and Payments provisions below; otherwise, the Partnership shall be dissolved and wound up in accordance with this Agreement and the Act.
47. A trustee in bankruptcy, transferee, or similar third party who acquires a dissociated Partner's interest shall acquire only such Partner's economic (transferable) rights and interests, and shall not acquire any other rights of that Partner, be admitted as a Partner, or have any right to participate in management or voting.
ARTICLE XXVII. DISSOCIATION OF A PARTNER.
48. Where the dissociation of a Partner results in the dissolution of the Partnership, the Partnership shall proceed in a reasonable and timely manner to wind up its affairs, with all debts being paid first, prior to any distribution of remaining assets. Valuation and distribution shall be determined as set forth in the Valuation of Interest section of this Agreement.
49. 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, a breach of this Agreement, or conduct that could reasonably be foreseen to cause harm or damage to the Partnership or its reputation.
ARTICLE XXVIII. DISSOLUTION AND WINDING UP.
50. Except as otherwise provided in this Agreement, the Partnership may be dissolved only with the unanimous vote of all the Partners.
51. Upon dissolution, each Partner shall share in any remaining assets and remaining liabilities of the Partnership in proportion to its ownership interest (the "Dissolution Distribution").
52. Upon dissolution and liquidation of Partnership property, and after payment of all selling costs and expenses, the liquidator shall distribute the Partnership assets in the following order of priority:
a. to creditors, including Partners who are creditors, in satisfaction of liabilities of the Partnership other than liabilities for distributions to Partners, to the extent required by the Act;
b. in satisfaction of Partnership debt obligations to current Partners; and then
c. to the Partners in accordance with the Dissolution Distribution described above.
53. The claims of each priority group shall be satisfied in full before satisfying any claims of a lower priority group. Any excess of Partnership assets after satisfaction of liabilities, or any insufficiency of Partnership assets to satisfy liabilities, shall be shared by the Partners in accordance with the Dissolution Distribution. Upon completion of the winding up, the Partnership shall file a statement of dissolution as may be required under the Act.
ARTICLE XXIX. VALUATION OF INTEREST.
54. In the absence of a written agreement setting a value, the value of the Partnership shall be determined based on a fair market value appraisal of all Partnership assets (less liabilities) in accordance with GAAP and a valuation of any tangible and intangible assets performed by an independent accounting firm agreed to by all the Partners. An appraiser shall be appointed within a reasonable period after the date of withdrawal or dissolution. The results of the appraisal shall be binding on all Partners. The intent of this section is to ensure that any dissociated Partner or such Partner's estate receives fair value for its share of the Partnership.
55. A withdrawing Partner shall remain obligated to the Partnership for any damages or costs incurred by the Partnership as a result of the withdrawal, and the Partnership may set off such damages or costs against any amounts owed to the dissociated Partner.
ARTICLE XXX. PAYMENTS.
56. Where there is a withdrawal of a Partner, whether voluntary or involuntary, and the Partnership is not dissolved as a result, the value of the dissociated Partner's interest, as determined under the Valuation of Interest section, shall be paid to the dissociated Partner or such Partner's legal representative. Payment shall be made by the Partnership within a reasonable period after the valuation is determined and may, at the option of the remaining Partners, be paid in a lump sum or in installments over a reasonable period of time with interest at a reasonable rate.
ARTICLE XXXI. TITLE TO PARTNERSHIP PROPERTY.
57. Title to all Partnership property shall remain in the name of the Partnership. No Partner or group of Partners shall have any ownership interest in such Partnership property, in whole or in part, except as a transferable interest in the Partnership itself.
ARTICLE XXXII. FORCE MAJEURE.
58. A Partner shall be excused from liability to the Partnership where prevented from performing its obligations under this Agreement, in whole or in part, due to a force majeure event, including earthquake, flood, fire, storm, epidemic, pandemic, governmental action, act of war, terrorism, or other unforeseen and uncontrollable event, provided the Partner has communicated the circumstances of such event to all other Partners and taken all reasonable action to mitigate the effects thereof.
ARTICLE XXXIII. DUTY OF LOYALTY.
59. No Partner shall engage, directly or indirectly, in any business, venture, or transaction that competes with the business of the Partnership or that creates a conflict of interest with the Partnership without the unanimous written consent of the remaining Partners. Any business, venture, or transaction with any appearance of conflict of interest must be fully disclosed to all other Partners. Failure to comply with this section shall be deemed an involuntary withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.
ARTICLE XXXIV. DUTY TO ACCOUNT FOR PRIVATE PROFITS.
60. Each Partner shall account to the Partnership for any benefit derived by that Partner, without the consent of the other Partners, from any transaction concerning the Partnership or any use by that Partner of the Partnership's property, name, or business connection. This duty continues to apply to transactions undertaken after dissolution but before the affairs of the Partnership have been completely wound up.
ARTICLE XXXV. DUTY TO DEVOTE TIME.
61. Each Partner shall devote such time and attention to the business of the Partnership as the majority of the Partners may from time to time reasonably determine for the conduct of the Partnership's business.
ARTICLE XXXVI. FORBIDDEN ACTS.
62. No Partner may do any act in contravention of this Agreement.
63. No Partner may permit, intentionally or unintentionally, the assignment of express, implied, or apparent authority to a third party that is not a Partner in the Partnership.
64. No Partner may do any act that would make it impossible to carry on the ordinary business of the Partnership.
65. No Partner may confess a judgment against the Partnership.
66. No Partner shall have the right or authority to bind or obligate the Partnership with regard to any matter outside the intended purpose of the Partnership.
67. Any violation of the foregoing Forbidden Acts shall be deemed an involuntary withdrawal of the offending Partner and may be treated accordingly by the remaining Partners.
ARTICLE XXXVII. INDEMNIFICATION.
68. To the fullest extent permitted by the Act, the Partnership shall indemnify and hold harmless each Partner from and against any and all claims, liabilities, losses, damages, and expenses (including reasonable attorneys' fees) arising out of such Partner's participation in Partnership affairs. A Partner shall not be entitled to indemnification under this section for liability arising out of the gross negligence or willful misconduct of such Partner or the breach by such Partner of any provision of this Agreement.
ARTICLE XXXVIII. LIABILITY.
69. A Partner shall not be liable to the Partnership or to any other Partner for any mistake or error in judgment, or for any act or omission done in good faith and believed to be within the scope of authority conferred or implied by this Agreement, except in the case of gross negligence, willful misconduct, or breach of this Agreement.
ARTICLE XXXIX. LIABILITY INSURANCE.
70. The Partnership may acquire insurance on behalf of any Partner, employee, agent, or other person engaged in the business of the Partnership against any liability asserted against or incurred by them while acting in good faith on behalf of the Partnership.
ARTICLE XL. LIFE INSURANCE.
71. The Partnership shall have the right to acquire life insurance on the lives of any or all of the Partners whenever deemed necessary by the Partnership. Each Partner shall cooperate fully with the Partnership in obtaining any such policies of life insurance.
ARTICLE XLI. AMENDMENTS.
72. This Agreement may not be amended in whole or in part except by an instrument in writing signed by all Partners.
ARTICLE XLII. GOVERNING LAW AND JURISDICTION.
73. This Agreement shall be governed by and construed in accordance with the laws of the State of ________, without regard to its conflict of laws principles. The Partners submit to the exclusive jurisdiction of the state and federal courts located in ________ County, State of ________, for the enforcement of this Agreement or any arbitration award or decision arising from this Agreement.
ARTICLE XLIII. DISPUTE RESOLUTION.
74. Any dispute arising out of or relating to this Agreement that cannot be resolved amicably by the Partners shall be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, with the arbitration to take place in ________. Judgment upon any award rendered may be entered in any court having jurisdiction thereof.
ARTICLE XLIV. SEVERABILITY.
75. If any provision or term of this Agreement is held to be invalid or unenforceable, this Agreement shall be deemed amended to the extent necessary to render the otherwise unenforceable provision, and the remainder of this Agreement, valid and enforceable. If a court declines so to amend this Agreement, the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the remaining terms and provisions, which shall be enforced as if the offending term had not been included.
ARTICLE XLV. MISCELLANEOUS.
76. Time is of the essence in this Agreement.
77. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered electronically or by facsimile shall be deemed original signatures for all purposes.
78. This Agreement constitutes the entire agreement among the Partners with respect to its subject matter and supersedes all prior negotiations, understandings, statements, and representations, whether oral or written. Only the written terms of this Agreement shall bind the Parties.
79. This Agreement and the terms and conditions contained herein shall be binding upon and inure to the benefit of the Partners' respective successors, permitted assigns, executors, administrators, heirs, beneficiaries, and representatives.
80. All rights, remedies, and benefits provided by this Agreement shall be cumulative and shall not be exclusive of any other rights, remedies, or benefits allowed by law.
81. Any notice required or permitted under this Agreement shall be in writing and shall be deemed duly given when delivered personally, when sent by a nationally recognized overnight courier, or three (3) business days after being sent by certified or registered United States mail, postage prepaid, return receipt requested, to the address of the relevant Party set forth at the head of this Agreement, or to such other address as a Party may designate by written notice. Notice given by electronic mail shall be deemed received upon confirmation of receipt.
82. The headings in this Agreement are for convenience only and shall not affect its interpretation. No waiver of any provision shall be effective unless in writing and signed by the Partner against whom it is asserted, and no waiver shall constitute a continuing waiver.
IN WITNESS WHEREOF, the Partners have executed and delivered this Agreement in the manner prescribed by law as of the Effective Date first written above.
PARTNER 1:
________
Signature:
_____________________________
Print Name: ________
Date:
_____________________________
PARTNER 2:
________
Signature:
_____________________________
Print Name: ________
Date:
_____________________________
STATE OF ________
COUNTY OF ________
On this ________, before me, the undersigned notary public, personally appeared ________, personally known to me or proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.
In witness whereof, I hereunto set my hand and official seal.
_____________________________
Notary Public
My commission expires: ________
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