Partnership Agreement

A legally binding agreement between the partners in a partnership business which serves to formalise and regulate both the partnership business as well as the relationship between the partners.

A Partnership Agreement is a legally binding agreement made between the partners of a partnership. It governs the business relationship between the partners and serves to formalise and regulate both the partnership business as well as the relationship between the partners. The Partnership Agreement sets out the rights and responsibilities of each partner, as well as how the partnership business is to be run. A partnership is a relatively simple and flexible means of running a business, whereby the partners carry on a common business and share in the profits and losses of that business. The partners may be either individuals or corporate entities and there is a maximum of twenty partners permitted in a partnership. The partners will have unlimited personal liability for the losses incurred by the partnership business. There are no formal rules applicable to Partnership Agreements and a written agreement is not a legal requirement. However, a Partnership Agreement is essential in ensuring the smooth running of the partnership, ensuring the security of the partners’ position in the partnership, as well as reducing disputes amongst the partners and providing certainty regarding the consequences of any actions by the other partners.

This comprehensive agreement contains the following clauses:

1. Interpretation and Preliminary
2. Constitution of Partnership
3. Duration
4. Partnership Property and Place of Business
5. Capital Accounts
6. Current Accounts
7. Profits and Losses
8. Drawings
9. Expenses
10. Advances to Partners – Loan Accounts
11. Financial Year
12. Banking Account
13. Books and Records
14. Financial Statements
15. Auditors
16. Good Faith
17. Management
18. Duties of Partners
19. Voting and Resolutions
20. Indemnity
21. Insurance
22. Holiday Leave
23. Confidentiality
24. Voluntary Retirement
25. Involuntary Retirement
26. Expulsion
27. Former Partners
28. Dissolution of Partnership
29. Restriction on Activities
30. Breach
31. Dispute Resolution
32. Whole Agreement – No Amendment
33. Governing Law and Jurisdiction
34. Counterparts
35. Notices
36. Costs
37. Signatures

Related Documents:

• Admission Of A New Partner Agreement
• LLP Agreement (Limited Liability Partnership) - Equal Responsibility