Partnership Agreement Solicitors
Are you starting, or have you started a business with a partner? Then a Partnership Agreement is something you should consider.
What is a Partnership Agreement and do I need one?
A Partnership Agreement is the foundation of any business you run in conjunction with another party. It dictates the way the business is run and the relationship and responsibilities between partners. Having one in place means that you’re able to dictate the terms that best suit your business and your partnership.
A business Partnership Agreement can specify arrangements for the continuation of the business if one partner leaves. It can also set out an understanding of their respective roles and authority to make certain decisions.
Without a specific Partnership Agreement being drawn up, your business partnership will be governed by the laws laid down in the Partnership Act of 1890. This Act makes a number of assumptions including:
- All partners are equal
- Each partner has the full authority to do anything in the partnership’s name
- Any partner can dissolve the partnership at any time
The default provisions of the Act do not, therefore, offer any real security or protection for partners or the business in general. This means each party may find themselves liable for the acts of another partner, without any obvious recourse. You have a modern business and should operate under arrangements that are bespoke to you and your circumstances. Not those established by 19th-century laws.
Whether you want to get advice from us on definitive partnerships, converting to or forming limited liability partnerships (LLPs), disposal of partnerships or restructuring following the departure of a partner, the Commercial Law team at Nash & Co Solicitors can help.
What are the benefits of a Partnership Agreement?
A Partnership Agreement gives all partners security and a written agreement of how the business will be run. It demonstrates that all partners have the best interests of the business and its growth at heart.
A Partnership Deed can be used to determine the share of profits. This does not need to be equal. Instead, it can serve to better reflect the respective time, effort and resources each partner is putting in. Simply put, a Partnership Agreement can help to distribute profits more fairly. As with profits, the Act determines that all partners share in the liabilities of the business equally. However, a Partnership Agreement can allow the partners to determine some other ratios in which they will share liability for debts of the business.
Agreements can also help to save huge amounts of money in legal proceedings. If disputes arise between business partners, things can become complicated. Ill feeling can arise if it is felt that a partner is ‘not pulling their weight’ or is demanding more than their entitlement on leaving the business.
Find out more
Each and every business is unique, so an “off the shelf” package just won’t capture everything that is important. A bespoke or tailored agreement will suit you much better, and this is something that our Commercial lawyers are experts in putting together. We’ve done it countless other times and ensured the smooth running of businesses and straightforward resolutions of partnership problems when they have arisen.
If you’d like pragmatic and reliable advice on a Partnership Agreement, get in touch with us. You can reach Austin Blackburn or one of the Commercial Law team by phone on 01752 827125 or by email on [email protected].
Alternatively, you can request a call back from any of our lawyers in Plymouth by submitting our contact form.