Elements of a Partnership Agreement
A partnership agreement is designed to assign duties and responsibilities, as well as address various issues like vacation and sick time. These agreements are often put in place in order to resolve any confusion, and to ensure that both parties understand what is required of them. Further, the agreement can greatly minimize the amount of damaging legal action in the case of a dispute. The following are some common elements present in a partnership agreement, and it is recommended that you have legal assistance on your side when preparing one:
- Name and address of the partnership or business
- Duration of the partnership - You can enact a specific termination date, or specific circumstances under which the partnership may be terminated such as mutual agreement or the death of a partner.
- Bank information - It is important to establish which bank accounts will be used, and which partners will have check-signing privileges.
- Contributions of each partner into the business venture - A clear inventory of the cash, assets, property, and services contributed by each partner will help to determine division in the case of termination.
- Partners' compensation - Establishing the compensation and pay that each partner will receive will help prevent disputes and fallouts in the future. In addition, work hours and vacation time should both be discussed and established.
- Management authority - Who can make decisions on their own, what the voting power is of each partner, how will tie votes be handled, and many other authority issues can be resolved through this.
- New partners - Establishing specific circumstances and elements under which a new partner may be added will help ensure the peace of all partners involved.
Legal Assistance in Preparation of an Agreement
These partnership agreements can address many different issues related to a partnership venture. If you are considering starting a business, then you need to ensure that your interests are protected. Even if you are close friends with the partner(s) that you are entering this venture with, there are circumstances under which enemies can be made. At Matthews Law Firm Inc., we can provide you with the skillful and aggressive legal assistance that you need on your side.