THIS AGREEMENT OF
PARTNERSHIP entered into this (specify date), by
and between (specify partners).
1. Name and Purpose. The
Partnership shall be carried on under the name of
(specify). The purpose of the Partnership shall
be (specify). Notwithstanding the foregoing, the
parties may conduct business as partners in any
other related or unrelated business activities to
which they shall mutually agree.
2. Place of Business. The
principal office of the Partnership shall be
located at (specify).
3. Partners. The name and
address of each of the partners is as follows:
4. Term. The Partnership
has commenced business on or about (specify) and
shall continue until terminated as provided for
in this Agreement.
5. Capital Contribution.
Each of the partners have made equal capital
contributions to the Partnership. Upon the
dissolution of the Partnership, each partner will
(specify method of distribution).
6. Net Profits and Losses.
Subject to such adjustments as may be required
pursuant to this Agreement, the net profits and
losses of the Partnership shall be shared by the
partners as follows: (specify). The amount of
annual "net profits" and "net
losses" shall be determined by the
accountant servicing the Partnership account and
computed according to: (specify, such as by
regular accounting practices).
7. Salaries and Cash Flow.
(Specify the amount of salaries and/or cash flow
to be distributed to each partner).
8. Management Duties: The
day-to-day affairs of the Partnership shall be
handled equally by both partners, who agree to
devote their full time and attention to the
business of the Partnership and who shall have
equal rights and say in the management of
Neither partner shall be
permitted to own an interest in, operate,
control, or participate in any other business
without the express written consent of the other,
which consent shall not be unreasonably withheld.
All partners shall provide services to the
business of the Partnership and each other as
proper and necessary, including keeping all
partners informed of any letters, accounts,
contracts, and other information which shall come
to their attention concerning the business of the
Partnership. All partners shall keep records of
each transaction of the Partnership to which they
are involved in, and shall maintain such records
at the Partnership's main office. Said records
shall be open for inspection and examination by
each of the partners or their duly authorized
representative, at all reasonable times.
9. Finances. The fiscal
year of the Partnership shall commence April 1 of
each year and end on March 31, at which time the
books of account shall be closed and balanced.
The books of the Partnership shall be kept on a
(specify, such as a cash basis). All partners
shall cause the funds of the Partnership to be
deposited in such bank account(s) as they shall
designate. Cheques and withdrawals shall be made
upon (specify, such as by all or two or more
10. Bank Account. The
Partnership shall open a Bank account or accounts
at a branch that is mutually agreeable and
convenient. The bank account shall always be
operated by atleast two or more partners jointly.
11. Admission. No new
partners may be admitted to the Partnership
except upon the unanimous written consent of all
partners. No loans or other business decisions
may be taken or made without the unanimous
consent of all partners.
12. Restrictions. No
partner shall borrow money in the name of the
Partnership or incur any liability without the
written consent of all other partners. No partner
shall pledge, cause a lien to be placed against,
encumber or sell his interest in the Partnership
in any way. In the event any partner violates the
provisions of this paragraph or makes
representations, warranties or commitments
binding the Partnership without all other
partners' consent, the breaching partner shall
indemnify and hold all other partners harmless
from any and losses, damages, attorneys fees and
costs incurred by the non-breaching partners.
13. Disability. (If
appropriate, define what constitutes a disability
and for how long a disabled partner will be able
to receive a salary or distributions of
14. Sale of Partnership
Interest. In the event a partner dies, retires,
or becomes disabled according to the above
definition, the remaining partner(s) shall have
the right to continue the business of the
Partnership under the present name. However, said
deceased, retired or disabled partner shall
receive the following remuneration for his or her
Partnership interest: (specify how the
Partnership is to be valued, such as one times
annual gross receipts or some other formula).
Closing shall be held no later than (specify)
days after the end of the calendar month in which
the offer to sell was made and shall take place
at (specify, such as the offices of the
accountant or attorney for the Partnership.)
15. Manner of Payment. The
selling partner shall receive (specify Rs) paid
over a period of (specify). All deferred payments
shall be evidenced by a series of promissory
notes bearing (specify interest rate), and
providing for the acceleration in the event of
default continuing (specify) days after written
notice of default is sent by the selling partner.
Notwithstanding the foregoing, the maker shall
have the right to prepay all or any of said notes
in the inverse order of their maturity without
premium or penalty.
16. Additional Items at
Closing. All credit cards and personal items
belonging to the Partnership shall be delivered
at closing. The selling partner or estate of the
deceased selling partner agrees to indemnify the
Partnership against any unknown and/or
unauthorized charges on such cards or property.
Any loans owed to the
Partnership by the deceased or selling Partner
shall be paid to the Partnership out of the first
monies received for the sale of his interest in
the Partnership; any loans owed to the selling or
deceased partner shall be paid at the time of
17. Dissolution. In the
event the remaining partners do not elect to
purchase the interest of the retiring or deceased
partner, or in the event the partners mutually
agree to dissolve the Partnership, the
Partnership shall terminate and the partners
shall proceed to liquidate the business of the
Partnership. All assets of the Partnership shall
be paid in the following manner: first to pay all
just debts of the Partnership; second, to pay all
undistributed funds (if any) in each partners'
drawing account; third, to pay all surplus cash
from the date of the last accounting to the date
of dissolution; fourth, to pay all receivables as
they are received; and fifth, the remaining
assets of the Partnership shall then be divided
equally among the partners.
18. Illegality. If any
provision of this Agreement shall be determined
by the arbitrators, or any court having competent
jurisdiction, to be invalid, illegal or
unenforceable, the remainder of this Agreement
shall not be affected thereby, but shall continue
in full force and effect as though such invalid,
illegal or unenforceable provision were not a
19. Notices. All notices
required to be sent must be mailed by certified
mail, return receipt requested to the partners'
last known address.
20. Binding Effect. This
Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their
respective next-of-kin, administrators,
executors, legal representatives, successors and
21. Waiver. No waiver or
modification of any of the provisions of this
Agreement or any rights or remedies of the
parties hereto shall be valid unless such change
is in writing, signed by the party to be charged.
22. Arbitration. Any claim
or controversy arising among or between the
parties hereto pertaining to the Partnership or
this Agreement, or the interpretation of this
Agreement, shall be settled by arbitration in
(specify location) under the Arbitration and
Conciliation Act, 1996 or the prevailing act
whose decision shall be final and binding.
IN WITNESS WHEREOF, the
parties have executed this Agreement on the day
and year first above written.
Name of Partner
Name of Partner
NOTE: This precedent
agreement contains many provisions that should be
considered and included in a partnership
agreement. Never draft such an agreement without
an expert's assistance.