Partnership Agreement – Free Legal Form, business partnership agreement.#Business #partnership #agreement


PARTNERSHIP AGREEMENT

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This PARTNERSHIP AGREEMENT is made on ____________, 20__ between ________________________________ and ________________________________.

1. NAME AND BUSINESS. The parties hereby form a partnership under the name of ________________________________ to conduct a ________________________________. The principal office of the business shall be in _______________________.

2. TERM. The partnership shall begin on ________________, 20____, and shall continue until terminated as herein provided.

3. CAPITAL. The capital of the partnership shall be contributed in cash by the partners as follows: A separate capital account shall be maintained for each partner. Neither partner shall withdraw any part of his capital account. Upon the demand of either partner, the capital accounts of the partners shall be maintained at all times in the proportions in which the partners share in the profits and losses of the partnership.

4. PROFIT AND LOSS. The net profits of the partnership shall be divided equally between the partners and the net losses shall be borne equally by them. A separate income account shall be maintained for each partner. Partnership profits and losses shall be charged or credited to the separate income account of each partner. If a partner has no credit balance in his income account, losses shall be charged to his capital account.

5. SALARIES AND DRAWINGS. Neither partner shall receive any salary for services rendered to the partnership. Each partner may, from time to time, withdraw the credit balance in his income account.

6. INTEREST. No interest shall be paid on the initial contributions to the capital of the partnership or on any subsequent contributions of capital.

7. MANAGEMENT DUTIES AND RESTRICTIONS. The partners shall have equal rights in the management of the partnership business, and each partner shall devote his entire time to the conduct of the business. Without the consent of the other partner neither partner shall on behalf of the partnership borrow or lend money, or make, deliver, or accept any commercial paper, or execute any mortgage, security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract to sell any property for or of the partnership other than the type of property bought and sold in the regular course of its business.

8. BANKING. All funds of the partnership shall be deposited in its name in such checking account or accounts as shall be designated by the partners. All withdrawals are to be made upon checks signed by either partner.

9. BOOKS. The partnership books shall be maintained at the principal office of the partnership, and each partner shall at all times have access thereto. The books shall be kept on a fiscal year basis, commencing _____________________ and ending _____________________, and shall be closed and balanced at the end of each fiscal year. An audit shall be made as of the closing date.

10. VOLUNTARY TERMINATION. The partnership may be dissolved at any time by agreement of the partners, in which event the partners shall proceed with reasonable promptness to liquidate the business of the partnership. The partnership name shall be sold with the other assets of the business. The assets of the partnership business shall be used and distributed in the following order: (a) to pay or provide for the payment of all partnership liabilities and liquidating expenses and obligations; (b) to equalize the income accounts of the partners; (c) to discharge the balance of the income accounts of the partners; (d) to equalize the capital accounts of the partners; and (e) to discharge the balance of the capital accounts of the partners.

11. DEATH. Upon the death of either partner, the surviving partner shall have the right either to purchase the interest of the decedent in the partnership or to terminate and liquidate the partnership business. If the surviving partner elects to purchase the decedent’s interest, he shall serve notice in writing of such election, within three months after the death of the decedent, upon the executor or administrator of the decedent, or, if at the time of such election no legal representative has been appointed, upon any one of the known legal heirs of the decedent at the last-known address of such heir. (a) If the surviving partner elects to purchase the interest of the decedent in the partnership, the purchase price shall be equal to the decedent’s capital account as at the date of his death plus the decedent’s income account as at the end of the prior fiscal year, increased by his share of partnership profits or decreased by his share of partnership losses for the period from the beginning of the fiscal year in which his death occurred until the end of the calendar month in which his death occurred, and decreased by withdrawals charged to his income account during such period. No allowance shall be made for goodwill, trade name, patents, or other intangible assets, except as those assets have been reflected on the partnership books immediately prior to the decedent’s death; but the survivor shall nevertheless be entitled to use the trade name of the partnership. (b) Except as herein otherwise stated, the procedure as to liquidation and distribution of the assets of the partnership business shall be the same as stated in paragraph 10 with reference to voluntary termination.

12. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.

Executed this ______________ day of _________________, 20_____ in _____________________ [city], _____________________ [state].



Creating a Partnership Agreement, business partnership agreement.#Business #partnership #agreement


Creating a Partnership Agreement

Business partnership agreement Business partnership agreement

If you and your partners don’t spell out your rights and responsibilities in a written partnership agreement, you’ll be ill-equipped to settle conflicts when they arise, and minor misunderstandings may erupt into full-blown disputes. In addition, without a written agreement saying otherwise, your state’s laws will control many aspects of your business.

How a Partnership Agreement Helps Your Business

A partnership agreement allows you to structure your relationship with your partners in a way that suits your business. You and your partners can establish the shares of profits (or losses) each partner will take, the responsibilities of each partner, what will happen to the business if a partner leaves, and other important guidelines.

The Uniform Partnership Act

Each state (with the exception of Louisiana) has its own laws governing partnerships, contained in what’s usually called “The Uniform Partnership Act” or “The Revised Uniform Partnership Act” (or the “UPA” or “Revised UPA”). These statutes establish the basic legal rules that apply to partnerships and will control many aspects of your partnership’s life unless you set out different rules in a written partnership agreement. (To find your state’s partnership statutes, see Nolo’s State Law Resources Legal Research page.)

Don’t be tempted to leave the terms of your partnership up to these state laws. Because they were designed as one-size-fits-all fallback rules, they may not be helpful in your particular situation. It’s much better to have an agreement in which you and your partners state the rules that will apply to your business.

What to Include in Your Partnership Agreement

Here’s a list of the major areas that most partnership agreements cover. You and your partners-to-be should consider these issues before you put the terms in writing:

  • Name of the partnership. One of the first things you must do is agree on a name for your partnership. You can use your own last names, such as Smith Wesson, or you can adopt and register a fictitious business name, such as Westside Home Repairs. If you choose a fictitious name, you must make sure that the name isn’t already in use and then file a fictitious business name statement with your county clerk. For more information, see Nolo’s article Registering Your Business Name.
  • Contributions to the partnership. It’s critical that you and your partners work out and record who’s going to contribute cash, property, or services to the business before it opens — and what ownership percentage each partner will have. Disagreements over contributions have doomed many promising businesses.
  • Allocation of profits, losses, and draws. Will profits and losses be allocated in proportion to a partner’s percentage interest in the business? Will each partner be entitled to a regular draw (a withdrawal of allocated profits from the business) or will all profits be distributed at the end of each year? You and your partners may have different financial needs and different ideas about how the money should be divided up and distributed, so this is an area to which you should pay particular attention.
  • Partners’ authority. Without an agreement to the contrary, any partner can bind the partnership (to a contract or debt, for example) without the consent of the other partners. If you want one or all of the partners to obtain the others’ consent before obligating the partnership, you must make this clear in your partnership agreement.
  • Partnership decision making. Although there’s no magic formula or language for making decisions among partners, you’ll head off a lot of trouble if you try to work it out beforehand. You may, for example, want to require a unanimous vote of all the partners for every business decision. Or if that leaves you feeling fettered, you can require a unanimous vote for major decisions and allow individual partners to make minor decisions on their own. In that case, your partnership agreement will have to describe what constitutes a major or minor decision. You should carefully think through issues like these before you and your partners have to make important decisions.
  • Management duties. You might not want to make ironclad rules about every management detail, but you’d be wise to work out some guidelines in advance. For example, who will keep the books? Who will deal with customers? Supervise employees? Negotiate with suppliers? Think through the management needs of your partnership and be sure you’ve got everything covered.
  • Admitting new partners. Eventually, you may want to expand the business and bring in new partners. Agreeing on a procedure for admitting new partners will make your lives a lot easier when this issue comes up.
  • Withdrawal or death of a partner. At least as important as the rules for admitting new partners to the business are the rules for handling the departure of an owner. You should set up a reasonable buyout scheme in your partnership agreement. To learn more about this issue, read Nolo’s article Plan Ahead for Changes in Partnership Ownership.
  • Resolving disputes. If you and your partners become deadlocked on an issue, do you want to go straight to court? It might benefit everyone involved if your partnership agreement provides for alternative dispute resolution, such as mediation or arbitration.

Next Steps

As you can see, there are many issues to consider before you and your partners open for business — and you shouldn’t wait for a conflict to arise before hammering out some sound rules and procedures. A good self-help book, such as Form a Partnership: The Complete Legal Guide, by Denis Clifford and Ralph Warner (Nolo), can help you think through the details and put them in writing.



Trump Abandons Trans-Pacific Partnership, Obama’s Signature Trade Deal, partnership business.#Partnership #business


The New York Times

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WASHINGTON — President Trump upended America’s traditional, bipartisan trade policy on Monday as he formally abandoned the ambitious, 12-nation Trans-Pacific Partnership brokered by his predecessor and declared an end to the era of multinational trade agreements that defined global economics for decades.

With the stroke of a pen on his first full weekday in office, Mr. Trump signaled that he plans to follow through on promises to take a more aggressive stance against foreign competitors as part of his “America First” approach. In doing so, he demonstrated that he would not follow old rules, effectively discarding longstanding Republican orthodoxy that expanding global trade was good for the world and America — and that the United States should help write the rules of international commerce.

Although the Trans-Pacific Partnership had not been approved by Congress, Mr. Trump’s decision to withdraw not only doomed former President Barack Obama’s signature trade achievement, but also carried broad geopolitical implications in a fast-growing region. The deal, which was to link a dozen nations from Canada and Chile to Australia and Japan in a complex web of trade rules, was sold as a way to permanently tie the United States to East Asia and create an economic bulwark against a rising China.

The Run-Up

Instead, Mr. Trump said American workers would be protected against competition from low-wage countries like Vietnam and Malaysia, also parties to the deal.

But some in both parties worry that China will move to fill the economic vacuum as America looks inward, and will expand its sway over Asia and beyond.

Monday was a busy day for the new president. In addition to abandoning the trade deal, he ordered a freeze on federal government hiring, except for the military and other security agencies. He reinstituted a ban on federal funding for overseas family planning groups that assist or counsel women seeking abortions. He met with congressional, labor and business leaders. And he promised to cut up to 75 percent of federal regulations.

Mr. Trump’s decision to scrap the Trans-Pacific Partnership, or T.P.P., reversed a free-trade strategy adopted by presidents of both parties dating back to the Cold War, and aligned him more with the political left. When he told a meeting of union leaders at the White House on Monday that he had just terminated the pact, they broke into applause.

“We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country, and it’s going to be reversed,” Mr. Trump told them, saying that from now on, the United States would sign trade deals only with individual allies. “I think you’re going to have a lot of companies come back to our country.”

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Interactive Feature | What Is TPP? Behind the Trade Deal That Died On his first full workday in office, President Trump delivered on a campaign promise by abandoning the enormous trade deal that had became a flashpoint in American politics.

Mr. Trump may also move quickly to renegotiate the North American Free Trade Agreement. He is scheduling meetings with the leaders of Canada and Mexico, the two main partners in that pact, which was negotiated by President George Bush and pushed through Congress by President Bill Clinton. While Nafta has been a major driver of American trade for nearly two decades, it has long been divisive, with critics blaming it for lost jobs and lower wages.

But free-trade advocates said that in canceling the Pacific pact, Mr. Trump lost an agreement that had already renegotiated Nafta under more modern rules governing intellectual property, internet access and agriculture, since both Mexico and Canada were signatories. He also undercut Mr. Obama’s so-called pivot to Asia and, critics said, essentially ceded the field to China, which was not part of the agreement.

“There’s no doubt that this action will be seen as a huge, huge win for China,” Michael B. Froman, the trade representative who negotiated the pact for Mr. Obama, said in an interview. “For the Trump administration, after all this talk about being tough on China, for their first action to basically hand the keys to China and say we’re withdrawing from our leadership position in this region is geostrategically damaging.”

Some Republicans agreed, but only a few would publicly challenge the president. Senator John McCain of Arizona called the decision “a serious mistake” that would hurt America. “It will send a troubling signal of American disengagement in the Asia-Pacific region at a time we can least afford it,” he said in a statement.

The Obama administration negotiated the trade pact for nearly eight years. Speaker Paul D. Ryan and other congressional Republicans worked with Mr. Obama to pass legislation granting so-called fast-track authority to negotiate it over Democratic objections. But Mr. Obama never submitted the final agreement for approval amid vocal opposition.

The agreement, the largest regional trade accord ever, brought together the United States and 11 other nations in a free-trade zone for about 40 percent of the world’s economy. It was intended to lower tariffs while establishing rules for resolving trade disputes, setting patents and protecting intellectual property.

Obama officials argued that it benefited the United States by opening markets while giving up very little in return. In particular, it finally brought the United States and Japan, the world’s largest and third-largest economies, together in a free-trade pact.

Mr. Trump’s decision was crushing for Japan, where Prime Minister Shinzo Abe spent considerable political capital to get the agreement through Parliament, which ratified it Friday. Just hours before Mr. Trump dispensed with it, Mr. Abe told Parliament that Tokyo would lobby the new administration on the merits of the deal.

Interactive Feature | Get the Morning Briefing by Email What you need to know to start your day, delivered to your inbox Monday through Friday.

Japan was the last to join the pact, which would give its manufacturers tariff-free access to export markets in the United States and other Asian countries, but would bring its automakers into competition with lower-wage countries like Mexico. Mr. Abe became a strong enthusiast after making politically painful concessions on agricultural imports that the United States had sought.

China, by contrast, welcomed Mr. Trump’s move, although its leaders will probably relish the moment quietly. Given Mr. Trump’s harsh attacks on China and his appointment of a leading China critic, Peter Navarro, to the new post of trade council director, Beijing is bracing for a potentially combative relationship.

Victor Shih, an expert on China’s political economy at the University of California, San Diego, said withdrawing from the T.P.P. would alter America’s image in the region. “The U.S. will be seen as an unreliable partner both economically and perhaps even in the security arena,” he said. “While some countries in Asia have no choice but to be close to the U.S., others may begin to look to China.”

China has already sought to capitalize by making a push to complete an alternative pact, the Regional Comprehensive Economic Partnership, which aims to unite 10 members of the Association of Southeast Asian Nations with Japan, South Korea, Australia, New Zealand and India.

Australia’s trade minister, Steven Ciobo, said on Monday that other members of the trade pact were exploring whether to create a “T.P.P. minus one,” without the United States.

“The T.P.P. offers very material benefits for all parties that signed up for the agreement,” he said in an interview. “It would be a great shame to lose those benefits. Notwithstanding President Trump’s decision, there’s still a lot of merits to capturing those gains.”

If Mr. Trump scrambled coalitions overseas, he did so at home, too. Democrats and labor groups praised his move. James P. Hoffa, general president of the Teamsters union, said Mr. Trump had “taken the first step toward fixing 30 years of bad trade policies.” Lori Wallach, director of Public Citizen’s Global Trade Watch, said it would “bury the moldering corpse” of the Pacific deal, though she expressed concern about how Nafta would be renegotiated.

Some people emerging from the union meeting with Mr. Trump, who won surprising victories in Midwestern labor strongholds, expressed enthusiasm for both his trade action and his promise to build new roads, bridges and other infrastructure.

“We just had probably the most incredible meeting of our careers,” Sean McGarvey, president of North America’s Building Trades Unions, said. “We will work with him and his administration to help him implement his plans on infrastructure, trade and energy policy, so we really do put America back to work.”

Reporting was contributed by Michael D. Shear in Washington, Edward Wong in Los Angeles, Daniel J. Wakin in New York, Peter S. Goodman in London and Motoko Rich in Tokyo.



MENTOR promotes, advocates and is a resource for mentoring, partnership business.#Partnership #business


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  • Partnership Agreement Vs, business partnership agreement.#Business #partnership #agreement


    Partnership Agreement Vs. Joint Ventures

    Business partnership agreement

    A partnership agreement may be an oral contract sealed with a handshake.

    Michael Hitoshi/Digital Vision/Getty Images

    Related Articles

    • 1 [Joint Venture] | What Is the Difference Between a Joint Venture a Partnership Agreement?
    • 2 [Venture Partnership] | What Is a Joint Venture Partnership?
    • 3 [Operating Agreement] | What Is a Joint Operating Agreement?
    • 4 [Joint Venture] | What Is the Difference Between a Joint Venture Strategic Alliance?

    When two or more individuals, groups, companies or corporations decide to jointly participate in business activities, they may enter into a partnership. Partnerships are governed by partnership agreements. Joint ventures are special types of partnership, and a joint venture agreement should cover additional factors not necessarily needed in a partnership agreement.

    Partnership

    A partnership involves two or more individuals, groups, companies or corporations. Each partner participates in business operations and is liable for company actions. Business debts and profits pass through to the partners. In a general partnership each partner is individually liable for the company s actions and debts. In a limited partnership the general partner is the managing partner with full responsibility and liability for the company s actions while the limited partner has limited liability and usually only provides capital and shares in the profit without participating in management of the business.

    Joint Ventures

    Joint ventures are typically short-term partnerships between two or more individuals, groups, companies or corporations. Entities usually engage in joint ventures for a single purpose, such as to access new markets or to share costs. Once established, a joint venture can structure its business as a general partnership; a limited partnership; a corporation, which is treated as an individual with its own assets, liabilities and taxes; or a limited liability company, which limits partner liability and allows pass through of profits. The governing laws for joint ventures depend on the scope of the partnership and the type of structure established to conduct business.

    Partnership Agreement Defined

    The Uniform Partnership Act, adopted by many states as the governing partnership law, defines a partnership agreement as the agreement, whether written, oral, or implied, among the partners concerning the partnership, including amendments to the partnership agreement. The partnership agreement is the contract that governs the behavior and actions of the partners in regards to the business. However, state law prevents the contract from eliminating certain duties of the partners. For example, the agreement cannot eliminate a partner s liability for actions of the company.

    Partnership Agreement Basics

    Partnership agreements are important because each partner can be held completely liable for the company s actions and can unilaterally make business decisions without the consent of other partners unless otherwise stipulated by the partnership agreement. The partnership agreement should outline distribution of shares, responsibilities and authority of each partner as well as make provisions for the termination or dissolution of the partnership.

    Joint Venture Agreement

    In addition to establishing the financial and managerial structure and providing for the dissolution of the partnership, a joint venture should outline the purpose of the joint venture as the partnership is formed to meet a specific business objective.

    References (6)

    About the Author

    Michele Jensen started writing professionally for businesses in 1999. Her writings include articles for eHow, Answerbag and COD, marketing materials and project-related documentation. She received her Bachelor of Science degree in electrical engineering from the University of Houston and a Master of Science degree in international relations from Troy State University.



    MENTOR promotes, advocates and is a resource for mentoring, partnership business.#Partnership #business


    partnership business

    • Partnership business

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  • Partnership business

    OUR MISSION

    Our mission is to fuel the quantity and quality of mentoring relationships for America’s young people and to close the mentoring gap

    Impact

    MENTOR maintains the Mentoring Connector, the only national database of youth mentoring programs connecting volunteers to opportunities in their local communities.

    Stay Connected

    You can stay up to date on new resources, opportunities to advocate, national initiatives, and news about youth mentoring by signing up for our newsletters to stay connected.

    Partnership business

    Community Engagement

    Community engagement is an undeniably critical part of ensuring that mentoring isn’t left to chance. Whether you’re a public official, teacher, counselor, school administrator, or business leader, we need your help and involvement to close the mentoring gap.

    Become a Mentor

    By searching the database, you are sharing your information with MENTOR, its affiliates, and any program you choose to contact. Your email address will not be sold, shared with third parties or used for any purposes other than to keep you updated on news and opportunities related to mentoring.



  • Transatlantic Trade and Investment Partnership (TTIP) – Trade – European Commission, partnership

    European Commission Directorate-General for Trade

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    EU and US publish TTIP state of play assessment

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    Read the joint assessment of the progress made in the negotiations since negotiations started in July 2013.

    Report of the 15th round

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    Read the detailed report of the round that took place in New York.

    15th round final press conference

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    Read the outcome of the 15th negotiation round that took place in New York.

    14th TTIP Round – read the full report

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    A detailed report of the 14th round of TTIP talks is now available. It sets out progress achieved, chapter by chapter.

    14th TTIP Round summarised by EU Chief Negotiator

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    The EU’s Chief TTIP negotiator discusses progress made after 14 rounds of talks.

    Transparency: Commission publishes additional documents

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    The European Commission publishes a record number of EU proposals from the ongoing 14th TTIP round.

    EU negotiating texts in TTIP- Updated on 14 July 2016

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    The European Commission is negotiating TTIP as openly as possible.

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    General Partnership, business partnership agreement.#Business #partnership #agreement


    business partnership agreement

    Business partnership agreementBusiness partnership agreement

    A general partnership (or simply partnership) is an association of two or more people carrying on a business with the goal of earning a profit. A partnership is viewed as being one and the same as its owners. There is little formality involved in creating a partnership. In fact, if someone can establish that you are in business with somebody else, then there is a general partnership. The intention or lack thereof of having a formal partnership is not important.

    Existence of a Partnership

    Rules for determining the existence of a partnership are outlined in Part II of the Uniform Partnership Act (UPA). Some of these rules are summarized as follows:

    1. Joint tenancy, common property, part ownership, etc. does not by itself establish a partnership, regardless of whether the owners of the property share any profits from it. Three ways to jointly own property are:

      Tenants in common – when one dies, one’s portion of the partnership is transferred to one’s heirs.

      Joint tenancy – right of survivorship – when one dies, the entire interest goes to the other person.

      Tenancy by entirety – for example, a husband and wife. Each tenant owns by whole and by part. If a third party has a claim against the husband, the claimant cannot go after the property since it belongs wholly to the wife as well. For this reason, banks often require both the husband and the wife to sign a loan.

      A person may be considered a partner even if not formally included in the partnership. This is known as partnership by estoppel. “Estoppel” means that one is not permitted to deny. In the context of partnerships, it means that a person cannot deny being a partner if he permits the partnership use his name. Take for example, a situation in which partner A and partner B start a business and offer non-partner C a profit interest in the company if they can use C’s name in the business. If a bank lends money to the partnership and the partnership becomes insolvent, C would be considered a partner and could be held liable.

      Like a sole proprietorship, a partnership has only one level of taxation. A partnership is a tax-reporting entity, not a tax-paying entity. Profits pass through to the owners and are divided in accordance with what is specified in the partnership agreement. There are no restrictions on how profits are allocated among partners as long as there is economic reason, so there is latitude in allocating income according to which partners have the best tax rates.

      While pass-through taxation is an advantage, owners of a partnership have unlimited personal liability. In general, each partner in a partnership is jointly liable for the partnership’s obligations. Joint liability means that the partners can be sued as a group. Several liability means that the partners are individually liable. In some states, each partner is both jointly and severally liable for the damages resulting from the wrongdoing of other partners, and for the debts and obligations of the partnership.

      Three rules for liability in a partnership are:

      1. Every partner is liable for his or her own actions.
      2. Every partner is liable for the actions of the other partners.
      3. Every partner is liable for the actions of the employees of the business.

      As an example to illustrate liability in a partnership, suppose there is a partnership formed by partners A, B, and C. If partner A accidentally runs over somebody while driving on a personal trip to the grocery store one weekend, then A alone has unlimited personal liability. If partner A accidentally runs over somebody while making a delivery for the partnership, then A still has unlimited personal liability, but all three partners would be jointly and severally liable. If the victim wins a judgement of $1 million against the partnership, and only partner B has the money, then B would have to pay the judgement. Partner B could assert a right of contribution against partner A, but if A has no money it would not be worth the effort. If an employee of the partnership, employee E, accidentally runs over somebody during the course of work, then the partnership is liable since the employer is responsible for the actions of an employee within the scope of business. If the accident happened while the employee stopped for something personal, then the employer would not be responsible (frolic and detour).

      Risk and Control

      Absent an agreement to the contrary, UPA gives partners equal voting rights, even if they contributed different amounts of capital. Squeeze-outs are a common issue in partnerships.

      Expense and formality

      As in the case of a sole proprietorship, if the partnership chooses a ficticious name (different from the names of the partners), it is required to file that name with the state.

      Fiduciary Duty in a Partnership

      Partners owe both a contractual duty and a fiduciary duty to one another. According to Black’s Law Dictionary, a fiduciary duty is the duty to act for someone else’s benefit while subordinating one’s personal interests to those of the other person. These days however, many operating agreements waive the fiduciary duty so that one can pursue other opportunities that may come along.

      Salmon wanted to lease some property in New York. The lease was to run from 1902 to 1922. He formed a partnership with Meinhard who put up 50% of the money. Salmon would be the active manager and would pay Meinhard 40% of the profits for the first five years, and 50% thereafter. In 1922 the lease was up for renewal and the owner of the property, speaking only with Salmon, offered to make some adjacent property available. Salmon signed a lease for the property on behalf of his own firm, Midpoint Realty Company, of which Meinhard was not an owner. Salmon had not told Meinhard anything about the new lease or even the possibility of a new project.

      Meinhard claimed that Salmon had a fiduciary duty to provide him the opportunity to participate in the deal.

      The court ruled in favor of Meinhard.

      The new deal was an extension of the old one. While Salmon did not act in bad faith, he had a fiduciary duty to Meinhard.

      As one person put it, a partnership is just like a marriage.

      Issues to Address when Forming a Partnership

      To reduce the chances of disputes among the partners, a written partnership agreement always should be drawn up before going into business as a partnership.

      The Revised Uniform Partnership Act (RUPA) was issued in 1994. It is a revision of the original Uniform Partnership Act that dates back to 1914. UPA is interstitial; it fills in the gaps in the specific partnership agreement.

      Issues to address in forming a general partnership:

      Amount of capital contributed by each person, and if more is needed at a later date, who contributes it, and any limitations to someone’s maximum contribution.

      Rights and responsibilities of each partner.

      Division of profits among the partners.

      Distribution of assets upon dissolution of the company. If one partner wakes up one day and wants out, the partnership dissolves. But liquidation would destroy the value of the business, so the partnership agreement should provide rules for a partner’s exit. One partner can transfer a profit interest to an external party, but not control. Some options for distribution of assets include:

      Right of first refusal – a provision that requires the departing partner to allow the remaining partners to buy his or her share of the business at the same price of a bona fide external offer.

      Right of first offer – since the time delay associated with giving existing partners the right of first refusal may discourage external parties’ interest in bidding, the right of first offer may be used instead. The right of first offer is a provision that requires the departing partner to offer to sell his or her share of the business to the other partners before offering it externally.

      Dutch auction – a provision in which one partner offers to sell to the other partner at a particular price. If the other partner refuses, the first partner must buy the other partners share at that price. This arrangement provides strong incentive for a fair asking price. Note that the term Dutch auction has other meanings as well – it also refers to both a descending price auction and to an auction in which several identical items are auctioned and all successful bidders pay the either the price of the lowest successful bidder or their bid prices, depending on the specific auction rules.

      Third party arbitrator – an outside party sets the price.

      Business partnership agreement

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      Partnership Agreement – Free Legal Form, business partnership agreement.#Business #partnership #agreement


      PARTNERSHIP AGREEMENT

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      This PARTNERSHIP AGREEMENT is made on ____________, 20__ between ________________________________ and ________________________________.

      1. NAME AND BUSINESS. The parties hereby form a partnership under the name of ________________________________ to conduct a ________________________________. The principal office of the business shall be in _______________________.

      2. TERM. The partnership shall begin on ________________, 20____, and shall continue until terminated as herein provided.

      3. CAPITAL. The capital of the partnership shall be contributed in cash by the partners as follows: A separate capital account shall be maintained for each partner. Neither partner shall withdraw any part of his capital account. Upon the demand of either partner, the capital accounts of the partners shall be maintained at all times in the proportions in which the partners share in the profits and losses of the partnership.

      4. PROFIT AND LOSS. The net profits of the partnership shall be divided equally between the partners and the net losses shall be borne equally by them. A separate income account shall be maintained for each partner. Partnership profits and losses shall be charged or credited to the separate income account of each partner. If a partner has no credit balance in his income account, losses shall be charged to his capital account.

      5. SALARIES AND DRAWINGS. Neither partner shall receive any salary for services rendered to the partnership. Each partner may, from time to time, withdraw the credit balance in his income account.

      6. INTEREST. No interest shall be paid on the initial contributions to the capital of the partnership or on any subsequent contributions of capital.

      7. MANAGEMENT DUTIES AND RESTRICTIONS. The partners shall have equal rights in the management of the partnership business, and each partner shall devote his entire time to the conduct of the business. Without the consent of the other partner neither partner shall on behalf of the partnership borrow or lend money, or make, deliver, or accept any commercial paper, or execute any mortgage, security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract to sell any property for or of the partnership other than the type of property bought and sold in the regular course of its business.

      8. BANKING. All funds of the partnership shall be deposited in its name in such checking account or accounts as shall be designated by the partners. All withdrawals are to be made upon checks signed by either partner.

      9. BOOKS. The partnership books shall be maintained at the principal office of the partnership, and each partner shall at all times have access thereto. The books shall be kept on a fiscal year basis, commencing _____________________ and ending _____________________, and shall be closed and balanced at the end of each fiscal year. An audit shall be made as of the closing date.

      10. VOLUNTARY TERMINATION. The partnership may be dissolved at any time by agreement of the partners, in which event the partners shall proceed with reasonable promptness to liquidate the business of the partnership. The partnership name shall be sold with the other assets of the business. The assets of the partnership business shall be used and distributed in the following order: (a) to pay or provide for the payment of all partnership liabilities and liquidating expenses and obligations; (b) to equalize the income accounts of the partners; (c) to discharge the balance of the income accounts of the partners; (d) to equalize the capital accounts of the partners; and (e) to discharge the balance of the capital accounts of the partners.

      11. DEATH. Upon the death of either partner, the surviving partner shall have the right either to purchase the interest of the decedent in the partnership or to terminate and liquidate the partnership business. If the surviving partner elects to purchase the decedent’s interest, he shall serve notice in writing of such election, within three months after the death of the decedent, upon the executor or administrator of the decedent, or, if at the time of such election no legal representative has been appointed, upon any one of the known legal heirs of the decedent at the last-known address of such heir. (a) If the surviving partner elects to purchase the interest of the decedent in the partnership, the purchase price shall be equal to the decedent’s capital account as at the date of his death plus the decedent’s income account as at the end of the prior fiscal year, increased by his share of partnership profits or decreased by his share of partnership losses for the period from the beginning of the fiscal year in which his death occurred until the end of the calendar month in which his death occurred, and decreased by withdrawals charged to his income account during such period. No allowance shall be made for goodwill, trade name, patents, or other intangible assets, except as those assets have been reflected on the partnership books immediately prior to the decedent’s death; but the survivor shall nevertheless be entitled to use the trade name of the partnership. (b) Except as herein otherwise stated, the procedure as to liquidation and distribution of the assets of the partnership business shall be the same as stated in paragraph 10 with reference to voluntary termination.

      12. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.

      Executed this ______________ day of _________________, 20_____ in _____________________ [city], _____________________ [state].