This document partnership agreement describes a general partnership relationship and sets out the basic structure of a partnership agreement.
Entering into a partnership
Before entering into a partnership, it is important for the parties to consider various business relationship options and the best vehicle within which to conduct a specific business. Parties should have regard to the business model and the parties involved.
If a partnership relationship best suits the business model and parties, the next step is to consider the most suitable type of partnership to be adopted. The options are:
- general partnership;
- limited partnership; or
- incorporated limited partnership.
Drafting a partnership agreement
Partnership law is governed by statute (each state has its own version of the Partnerships Act), but the partnership relationship is based primarily in contract.
It is important that the person drafting a partnership agreement is familiar with the relevant partnership legislation. The practitioner should consider whether the business relationship actually constitutes a partnership, and which provisions of the relevant partnership legislation should be applicable.
However, as long as the basic tenets of partnership exist in the business relationship, partners can customise their unique business arrangements through the contract. These arrangements can be express, implied or by conduct.
This precedent provides the basic structure of a partnership agreement, but does not reflect all the possible permutations available to a partnership relationship.
This document has been authored for Lexis Nexis by Yaseen Shariff, Barrister and Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.