Business Partnership Agreement Lawyer in Philadelphia
Forging a new business partnership can be an extremely exciting undertaking. The opportunity to market a new idea or product or to simply create a business of your own making likely has you ecstatic about future possibilities and profits. This is all well and good, but you and your potential partners should take a step back and carefully consider your roles and responsibilities as partners. There are many questions that need answering before entering into a partnership.
A partnership agreement is essential to the formation of a strong partnership, unburdened by unnecessary encumbrances and obstacles. Retaining a knowledgeable Business Law Attorney can help you and your partners to establish clear parameters around your business.
What Aspects of a Partnership Does the Agreement Cover?
Everything! Every single detail of the partnership can be covered by this agreement. This is why it is so important to your long term business stability. With a partnership agreement, you'll have a written incorporation of how you plan on running the business, the purpose of the business, dividing costs, dividing profits, partner responsibilities, how partners will exit the business, and many other partnership concerns.
Without this agreement you will be leaving yourself at the mercy of statute. Every state (except Louisiana) has its own laws which govern partnerships, called "The Uniform Partnership Act" or "The Revised Uniform Partnership Act". To avoid these laws which treat partnerships with a one-size-fits-all mentality, the creation of a partnership agreement will allow you to mold rules to your partnership's purposes.
Partnership Agreement Specifics
Before meeting with your attorney, give some thought to what information you need to be covered by a partnership agreement. Some key provisions, include:
- The name of the partnership.
- The date the agreement is effective.
- The primary purpose of the partnership. What does the partnership do?
- Contributions to the partnership. Who brings what to the partnership and is usually reflective of who owns what percentage in the partnership.
- Allocation of profits, losses, etc. How will money be divided amongst the partners?
- Partner decision making parameters. Will there be a vote? Will votes be based on percentage or equal?
- Partners' authority. Who is empowered to do what without other partners' consent?
- Management duties. Who is responsible for what?
- Financial specifics. Who maintains accountings? How often will finances be audited?
- Admitting new partners. Under what process and circumstances can a new partner be added?
- Withdrawal of partner. What must a partner or the partnership do in order for a partner to exit the partnership?
- Dissolution of a partnership. How a partnership is ended; by majority, single vote, etc?
- Resolving disputes. Are disputes resolved by adr, court, or some other means?
This content was written on behalf of Greg Prosmushkin.