Partnership agreement
Partnership agreement form
PARTNERSHIP AGREEMENT
This PARTNERSHIP AGREEMENT is made on ____________, 20__ between
______________________ and ________________ of ____________.
1. NAME AND BUSINESS. The parties hereby form a partnership under the name
of ___________________ to conduct a _______________________. The principal
office of the business shall be in _____________________.
2. TERM. The partnership shall begin on ___________, 19__, and shall continue
until terminated as herein provided.
3. CAPITAL. The capital of the partnership shall be contributed in cash by the
partners as follows: A separate capital account shall be maintained for each partner.
Neither partner shall withdraw any part of his capital account. Upon the demand of
either partner, the capital accounts of the partners shall be maintained at all times
in the proportions in which the partners share in the profits and losses of the partnership.
4. PROFIT AND LOSS. The net profits of the partnership shall be divided equally
between the partners and the net losses shall be borne equally by them. A separate
income account shall be maintained for each partner. Partnership profits and losses
shall be charged or credited to the separate income account of each partner. If a
partner has no credit balance in his income account, losses shall be charged to his capital account.
5. SALARIES AND DRAWINGS. Neither partner shall receive any salary for services
rendered to the partnership. Each partner may, from time to time, withdraw the
credit balance in his income account.
6. INTEREST. No interest shall be paid on the initial contributions to the capital
of the partnership or on any subsequent contributions of capital.
7. MANAGEMENT DUTIES AND RESTRICTIONS. The partners shall have equal rights in the
management of the partnership business, and each partner shall devote his entire
time to the conduct of the business. Without the consent of the other partner
neither partner shall on behalf of the partnership borrow or lend money, or make,
deliver, or accept any commercial paper, or execute any mortgage, security agreement,
bond, or lease, or purchase or contract to purchase, or sell or contract to sell any
property for or of the partnership other than the type of property bought and sold in
the regular course of its business.
8. BANKING. All funds of the partnership shall be deposited in its name in such checking
account or accounts as shall be designated by the partners. All withdrawals
there from are to be made upon checks signed by either partner.
9. BOOKS. The partnership books shall be maintained at the principal office of the
partnership, and each partner shall at all times have access thereto. The books shall
be kept on a fiscal year basis, commencing ______ and ending _______, and shall be closed
and balanced at the end of each fiscal year. An audit shall be made as of the closing date.
10. VOLUNTARY TERMINATION. The partnership may be dissolved at any time by agreement of
the partners, in which event the partners shall proceed with reasonable promptness to
liquidate the business of the partnership. The partnership name shall be sold with the
other assets of the business. The assets of the partnership business shall be used and
distributed in the following order: (a) to pay or provide for the payment of all partnership
liabilities and liquidating expenses and obligations; (b) to equalize the income accounts of
the partners; (c) to discharge the balance of the income accounts of the partners; (d) to
equalize the capital accounts of the partners; and (e) to discharge the balance of the capital
accounts of the partners.
11. DEATH. Upon the death of either partner, the surviving partner shall have the right either
to purchase the interest of the decedent in the partnership or to terminate and liquidate
the partnership business. If the surviving partner elects to purchase the decedent's interest,
he shall serve notice in writing of such election, within three months after the death of the
decedent, upon the executor or administrator of the decedent, or, if at the time of such electionno legal representative has been appointed, upon any one of the known legal heirs of the decedent
at the last-known address of such heir. (a) If the surviving partner elects to purchase the
interest of the decedent in the partnership, the purchase price shall be equal to the decedent's
capital account as at the date of his death plus the decedent's income account as at the end of
the prior fiscal year, increased by his share of partnership profits or decreased by his share of
partnership losses for the period from the beginning of the fiscal year in which his death occurred
until the end of the calendar month in which his death occurred, and decreased by withdrawals
charged to his income account during such period. No allowance shall be made for goodwill, trade
name, patents, or other intangible assets, except as those assets have been reflected on the
partnership books immediately prior to the decedent's death; but the survivor shall nevertheless
be entitled to use the trade name of the partnership. (b) Except as herein otherwise stated, the
procedure as to liquidation and distribution of the assets of the partnership business shall be
the same as stated in paragraph 10 with reference to voluntary termination.
12. ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the
breach hereof, shall be settled by arbitration in accordance with the rules, then obtaining, of
the American Arbitration Association, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. In witness whereof the parties have signed this Agreement.
Executed this ______________ day of _________________, 20_____ in [CITY], [STATE].
_______________________________________________________
_______________________________________________________
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