Free partnership agreement template (Word)

PARTNERSHIP AGREEMENT

This Partnership Agreement is made on [Effective date] between the following partners (each a "Partner"):

1. The partnership

The Partners form a general partnership under the name [Partnership name] (the "Partnership") to carry on the business of [Business purpose]. Its principal place of business is [Business address]. The Partnership starts on [Effective date] and continues until it is dissolved under this Agreement.

2. Contributions

Each Partner will make the contribution listed next to their name by [Contribution due date]. No Partner earns interest on a contribution, and no Partner may withdraw a contribution except on dissolution or as all the Partners agree in writing.

3. Profits, losses and drawings

The Partners share the Partnership's net profits and losses in proportion to the shares listed above. Profits are worked out and allocated at the end of each financial year.

Each Partner may draw up to [Monthly draw amount] a month against their expected share of profits. Drawings are deducted from that Partner's share when profits are allocated.No Partner may take money out of the Partnership except as a distribution of profits agreed by the Partners.

No Partner is entitled to a salary for work on the Partnership business, except as follows: [Salary details].

4. Management and decisions

Each Partner has an equal say in managing the Partnership and may make day-to-day decisions in the ordinary course of its business. No Partner may commit the Partnership to spending more than [Spending limit amount] in a single transaction without the consent of the other Partners.

The following decisions need the consent of all the PartnersPartners holding more than half of the shares:

Admitting a new Partner, changing this Agreement or dissolving the Partnership always needs the written consent of all the Partners.

5. Duties of the Partners

Each Partner will devote [Time commitment] to the Partnership business, act in good faith and in the Partnership's best interests, and tell the other Partners about any personal interest in a Partnership transaction. While a Partner, no Partner will run or join a business that competes with the Partnership without the written consent of the other Partners.

6. Bank account and records

The Partnership will keep its money in an account in its own name at [Bank name]. Any payment above [Two signature threshold amount] needs the approval of two Partners. The Partnership will keep complete books of account at its principal place of business, and every Partner may inspect and copy them at any reasonable time.

7. New partners and transfers

A new Partner may join only with the written consent of all the Partners and by signing this Agreement. No Partner may sell, assign or pledge their interest in the Partnership without the written consent of the other Partners.

8. Leaving the Partnership

A Partner may withdraw by giving the other Partners at least [Withdrawal notice days] days' written notice. If a Partner withdraws, dies or becomes permanently unable to work in the business, the remaining Partners may continue the Partnership and buy that Partner's interest at a price worked out as follows: [Buyout price terms] at its fair market value, as agreed or, failing agreement, as valued by an independent accountant chosen by the remaining Partners. The remaining Partners will pay that price within [Buyout months] months, in equal instalments.

9. Dissolution

The Partnership is dissolved if all the Partners agree in writing, or if only one Partner remains and does not continue the business. On dissolution the Partners will wind up its affairs, sell its assets as needed, pay its debts, repay each Partner's contribution, and then divide what is left in the proportions in which they share profits.

10. Disputes

The Partners will try to settle any dispute about this Agreement by discussion. If they cannot settle it within 30 days, they will try mediation with a mediator they agree on before starting court proceedings, and share its cost equally.

11. General

This Agreement is the entire agreement between the Partners about the Partnership and replaces any earlier understanding. Any change must be in writing and signed by all the Partners. If any part of this Agreement cannot be enforced, the rest remains in effect. This Agreement is governed by the laws of [Governing law].

Signed by the Partners: