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 ___________, 20__, 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 current account or accounts as
shall be designated by the partners. All
withdrawals therefrom are to be made upon cheques
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 election no 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 Arbitration and Conciliation Act, 1996
or the prevailing act.
In witness whereof
the parties have signed this Agreement.
Executed this
______________ day of _________________, 20_____
at__
Partner_______________________________________________________
Partner_______________________________________________________
NOTE: The
agreement should be registered
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