A partnership is a popular form of business structure for Buffalo residents to use when they are establishing their new business entities. A partnership requires more than one owner and generally will be governed by the partnership agreement that the partners make at the outset of their venture. This post will address some of the terms that a partnership agreement should include, but as with all legal matters, readers are reminded that independent legal counsel should be sought for advice on specific business law matters.
A partnership agreement should name the partners to the entity as well as the name that they have chosen for their venture. The agreement should dictate what authorities the partners have, and if there are any powers that they will not share who will hold each of those powers independently. Additionally, the agreement should make clear how the partners will profit from the successes of their entity or, if necessary, the partners will cover the losses of the partnership.
Many businesses anticipate growth, and therefore a partnership agreement should explain if and how new partners may be joined into the entity. It should also explain how the business will handle the leaving or death of a partner to it. As with all agreements, a partnership contract should provide guidance on how the partners may settle disagreements if they arise between those included in the venture.
Partnership agreements are extensive documents that govern the working relationships of the partners. They can be drafted with the assistance and oversight of business law attorneys who understand the important elements that different business documents require in order to be successful.