The partnership agreement is a written account of all the terms you and your partner agreed on when you started the company. You must have everything spelled out so you can refer to it if there’s an issue in the future.
You can include several things in the agreement besides the basic information like the name of the partnership, principal office, term and purpose. Be sure to consider these carefully to include the ones that apply.
What are the duties of each partner?
Clearly outlining the duties of each partner is important because you need to know what you’re in control of. Make sure that this is detailed. One point to consider here is outlining a plan for who will take over the partner’s duties when one partner is on leave or vacation.
How are decisions made?
Some decisions require input from all partners. List these out in the partnership agreement, so everyone knows what they need to come to the partners with. Outline how these decisions will be made so that plan can go into effect when necessary.
What happens if there’s a dispute?
Partnership disputes can negatively impact the business. Outline how these will be handled. For example, consider whether these will be dealt with using mediation, arbitration or litigation.
It’s always best to start a partnership off by protecting the business. Getting the agreement in order is one of the most effective ways to do this. Working with someone familiar with partnership agreements can help to ensure you include all the applicable points for your industry.