The Partnership Contract template is an important tool. It provides business representatives follow step-by-step instructions when drafting the document. It contains tips on what exactly is to be indicated in each of the boxes. This document is written by two or more business representatives who are or intend to be in a partnership relationship with each other. It describes how they will deal with each other and distribute their company’s profits and losses.
Matters to be formalized in the Partnership Contract template
The Partnership Agreement sample features five basic elements, such as
- Company name.
- Partners (full names).
- Objective (type of business).
- Place of business (the company’s address).
- Distribution (profit/loss ratio).
One of the essential points is the contribution of each of the partners. You need to describe what each business owner contributes specifically, for instance, money, furniture, supplies, concepts, and industry knowledge. The document can be provided to creditors or investors upon request.
Information to be indicated in the Partnership Agreement sample
It is required to include information about the commencement and termination of the business activities (if it is a fixed-term business). It is important to indicate the objective of the business activities (not only profit-making). The distribution of profits and losses is described. Instructions on actions to be taken in the case of death or withdrawal of one of the partners are described. Information about the four types of accounts can be given.
- Capital. The capital contributions of each business owner are taken into account.
- Income. It is used to compare profits and losses.
- Earnings. It specifies the regularity of income payouts (exact amount or percentage of profits).
- Banking. Funds that will be spent on general needs are transferred.
An important emphasis is placed on management. The possibility of keeping books and access of persons who are authorized to check records are also stipulated. Furthermore, it is recommended to include details about the responsibilities of the partners. It is important to describe in detail how and under what conditions newcomers can join the business. It is recommended to draft a “Partners” section with the following six items:
- Withdrawal. How to get out of a cooperative arrangement.
- Retirement. What happens when one of the businessmen ceases to work.
- Termination. Possibility and reasons for termination of the agreement.
- Termination procedure. How to terminate a contract or remove one of the business owners from the association.
- Death. What happens if one of the members dies.
- Buyout. Whether it is possible to buy another partner’s share (from the partner personally or from a successor).
The body of the document should contain general clauses, for instance, restrictions imposed on assignment. Such a clause stipulates whether a business owner is entitled to transfer the owned interest. There also should be a clause describing the possibility to resolve disputes through arbitration. An important point is applicable jurisdiction and legislation. Which country’s laws will apply if the parties have to take the case to court? The answer to this question should be given jointly with a lawyer. At the final stage, the document is registered with the relevant state authorities.
What the Pandadoc software is used for
Pandadoc is software with extensive possibilities of application, including the use of digital signatures. It is possible to process a document in real-time. Users can optimize document management and increase their sales share. The advantages include:
- saving time required for the file generation;
- automatic inclusion of links;
- capabilities to add payment forms and videos.
A drafting tool can be used that enables users to generate documents by dragging and dropping templates. Standard content is added along with input fields. You can customize contact rollers with an image of the official authorized to sign contracts.