This is a clause which can be inserted into a partnership agreement.
Where some partners work within the business and others do not, it is common to incorporate a clause specifically providing the working partners with the right to draw a salary over and above any monthly drawing allowed under the partnership agreement.
This clause allows the business to set out salary requirements specific to the business. It is important to also set out the agreed process for salary review and increases on an ongoing basis.
Using this precedent
This clause can be inserted into a partnership agreement. It can also be used in the separate precedent “Partnership agreement (short form, general)”.
When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.
This document has been authored for Lexis Nexis by Michael Heraghty, Partner, TressCox Lawyers, Rosemarie Ryan, Barrister and Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editor Stephen Newman, Executive Counsel, Ponte Earle.