State of _________
County of _________
This Partnership Agreement (the "Agreement") is made this _________ day of _________, _________ (the "Effective Date"). The Partnership in this Agreement is made by and between the following parties (the "Partners"):
Partner Name: _________
Address: _________
E-mail: _________
Partner Name: _________
Address: _________
E-Mail: _________
The Partners agree to form a Partnership as set forth in this Agreement under the following terms and conditions:
A. NAME
The Partners in this Partnership shall operate under the name of _________ (the "Partnership").
B. PARTNERSHIP CHANGE OF NAME
In addition to the foregoing name, the activities and business of the Partnership may be conducted under such other name or names as may be designated from time to time by the Partnership. The foregoing name of the Partnership may also be amended upon the written and unanimous vote of all Partners.
Subject to certain circumstances which are described in detail below, if a Partner withdraws or dies and his or her interests in the Partnership are successfully bought out, the Partnership may change its name subject to the written and unanimous vote of all Partners.
C. PURPOSE OF THE PARTNERSHIP
The Partners voluntarily associate themselves and have come together to become legal partners for the following purpose or business: _________.
D. DURATION, TERMINATION, PLACE OF BUSINESS, AND OTHER RELATED MATTERS
• If the Agreement is executed, the Partnership shall commence on the _________ day of _________, _________, and continue until dissolved by mutual agreement or until terminated as provided in this Agreement.
• The principal place of business of the Partnership will be _________, _________, _________, _________ and/or such other place as may be mutually agreed on by the Partners.
• If applicable, the Partners will obtain any necessary licenses and permits to do business, register its Doing Business As Name ("DBA"), and obtain a Federal Employer Identification Number ("EIN").
E. INITIAL CAPITAL CONTRIBUTIONS
Initial capital contribution to the Partnership shall consist of:
• _________: $_________
• _________: $_________
A Joint Capital Account (a "Capital Account") shall be established for all contributions submitted by the Partners. Unless all Partners consent in writing to a withdrawal, all capital contributions shall be considered final and submitted by _________.
F. OWNERSHIP INTEREST
The ownership interests that the Partners shall have in the Partnership will be as follows:
• _________: _________%
• _________: _________%
G. MANAGEMENT AND AUTHORITY
Unless otherwise stated herein, the following criteria shall govern over all Partners:
• Each Partner shall have an equal voice and an equal vote in the management of the Partnership.
• Partners shall not have the individual authority to bind the Partnership in making contracts and incurring obligations in the name and on the credit of the Partnership.
• All decisions affecting the Partnership shall be valid, provided that every one of those decisions is based on a majority of equal votes.
The Partners agree to opt out of appointing or naming a Partnership Representative under 26 U.S. Code § 6221.
H. COSTS
Each Partner shall have a cost sharing percentage in accordance to the following:
• _________: _________%
• _________: _________%
I. PROFITS
From and after the commencement date of this Agreement, all net profits of the Partnership shall be shared by the Partners in accordance to the following percentages:
• _________: _________%
• _________: _________%
Once the costs of the Partnership have been paid in accordance to the cost sharing percentages designated herein, _________ shall account and distribute the net profits on the _________ of the month, according to the net profit percentages indicated above.
J. SALARIES AND DRAWINGS
No Partner shall receive any salary for services rendered to the Partnership, unless said Partners agree by unanimous consent to a permanent salary. In that case, the Partners shall have drawings in such amounts as may be agreed upon by the Partners.
K. ACCOUNTINGS
• A complete accounting of all Partnership accounts and affairs shall be audited and rendered to each Partner as of the close of business on the last day of each sixth month.
• All Partners shall maintain a joint contribution account. All Partners shall maintain a joint distribution account.
At all times during the continuance of the Partnership, all Partners shall keep accurate and complete books of account in which all matters relating to the Partnership, including all income, expenditures, assets, and liabilities, shall be entered. The books shall be kept open to examination to all Partners, regardless of whether they are majority or minority Partners, upon their request.
• Each Partner shall be individually responsible for his or her own share of income taxes on any distributions made.
• The Books of Account shall be kept on a cash basis.
• The fiscal year of the Partnership shall end on the last day of _________ of each year. For each fiscal year, all Partners will present their position on the state of the Partnership within _________ day(s) of the completion of this one-year period.
• The following Partners shall have authority to sign or draw checks from any Joint Capital Account:
- _________
- _________
L. NEW PARTNERS
New partners may be added to the Partnership in one of two ways:
• A new partner may enter the Partnership by invitation from the existing Partners.
• A new partner may also enter the Partnership by purchase of a deceased, retiring, withdrawing, or disabled partner's interests.
The Partnership shall amend this Agreement to include new partners upon the written and unanimous vote of all Partners.
M. WITHDRAWAL OF A PARTNER
Any Partner may withdraw from the Partnership giving each of the remaining partners at least _________ days' prior written notice of his or her intentions to withdraw. The withdrawal will become effective on the termination of the _________-day notice.
When a Partner withdraws, his or her interest shall be determined by evaluating the worth of the Partnership, and the withdrawing partner shall be paid the following:
1. A cash payment for the value of his or her unrepaid capital contributions, plus _________% interest on such contributions.
2. A cash payment in _________ equal installments, every _________ months, commencing _________ days after the close of the current fiscal year for his or her interest in the current year's profits.
3. An annual cash payment _________ days after the close of each fiscal year for the Partner's share of receipts from the business obtained prior to his or her withdrawal but completed after withdrawal.
4. Any annual fiscal losses of the Partnership or draws by the withdrawing partner prior to the withdrawal will be deducted from these sums.
The Partnership shall have the right to buy out the remaining property interests in the Partnership within _________ days. If no individual Partner(s) finalize a purchase agreement by _________ days after the withdrawing partner gives them notice of said withdrawal, the Partnership will be dissolved.
To prevent dissolution of the Partnership, the Partners may allow a new member to buy the withdrawing partner's interests in the Partnership.
N. DEATH OF A PARTNER
Upon the death of one of the Partners, the Partnership shall have _________ days to choose if they want to buy out the deceased partner's interest and distribute it equally between them.
The deceased partner's interests in the Partnership will be established based on his or her date of death, representing:
1. The total of the decedent's capital contribution to the Partnership.
2. His or her share of the net profits or losses for the current fiscal year to the date of death.
3. His or her share of the current business at the date of death.
4. Deducting therefrom any draw that the decedent had taken during the current fiscal year and any indebtedness of the decedent to the Partnership.
If the Partnership does not choose to use its option to buy out the deceased partner's interest in the Partnership, the Partners may cast a majority vote to allow the deceased partner's estate to continue to share in the partnership's profits and losses, just as the deceased person would have if he or she were alive. In such case, however, the estate shall not, as a transferee, participate in any management role of the Partnership nor have a right to vote.
If the remaining Partners do not use their option to buy out the remaining interest of the Partnership and distribute them equally, or if a majority of the Partners do not vote to allow the deceased partner's estate to become a transferee, interested individual partners will have the right to buy the interest equally.
If there is not a single individual partner interested in buying out the remaining interest, the Partnership shall be dissolved.
To prevent dissolution of the Partnership, the Partners may allow a new member to buy the deceased partner's interests.
O. VALUATION OF REMAINING PARTNERSHIP INTEREST
If a Partner withdraws or dies, as referenced above, the Partners shall unanimously agree to hire an external accounting firm to assess the value of the remaining share of interests. If the appraisal figures rendered by the external accounting firm do not satisfy the Partners, a second accounting firm may assess the value of the remaining share of interest in the Partnership. If the Partners do not agree to the appraisals or are not acceptable to them, the matter shall be subjected to an alternative dispute resolution as herein provided.
P. DISSOLUTION
The Partnership may be dissolved and liquidated, and all debts shall be paid upon the majority vote of all the partners. Any remaining funds shall be distributed on a percentage of ownership interest established under this Agreement.
Q. AMENDMENTS AND NOTICES
• This Agreement may be amended only with the unanimous consent of all the Partners and by, or in, writing signed by all the Partners.
• All notices between the Partners provided for or permitted under this Agreement or by law, shall be in writing and shall be deemed duly served when personally delivered to a partner, or, in lieu of such personal service, when deposited in the United States mail, certified, postage prepaid, addressed to the Partner at the address of the principal place of business of the Partnership or to such other place as may from time to time be specified in a notice given pursuant to this paragraph as the address for service of notice on the partner.
IN WITNESS WHEREOF, this Agreement has been executed and delivered in the manner prescribed by law as of the Effective Date first written above.
By: ________________________________ Date: _______________
_________
By: ________________________________ Date: _______________
_________
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