Free Partnership Agreement Template

GENERAL PARTNERSHIP AGREEMENT

This Agreement is made on [DATE] between the partners listed in Schedule A (each a "Partner") to form [PARTNERSHIP NAME] ("Partnership").

IMPORTANT: In a general partnership, each Partner may be personally liable for all debts and obligations of the Partnership, including those caused by other Partners. Consider forming an LLC or limited liability partnership for liability protection.

1. FORMATION AND PURPOSE. The Partners form a general partnership under the laws of [STATE] to conduct [DESCRIBE BUSINESS]. Principal place of business: [ADDRESS]. The Partnership will register any assumed business name as required.

2. TERM. The Partnership begins on [DATE] and continues until dissolved under this Agreement.

3. CONTRIBUTIONS. Each Partner has contributed the cash, property or services listed in Schedule A. No Partner must contribute more unless the Partners agree [unanimously / by majority]. No interest is paid on contributions.

4. CAPITAL ACCOUNTS. A capital account will be kept for each Partner, credited with contributions and share of profits and debited with distributions and share of losses.

5. PROFITS, LOSSES AND DISTRIBUTIONS. Profits and losses are shared [in proportion to the percentages in Schedule A / equally]. Distributions will be made [quarterly] as the Partners decide, after reserves for expenses and obligations. The Partnership will make tax distributions where cash allows.

6. SALARIES AND DRAWS. [No Partner receives a salary. / Partners receive guaranteed payments of $[AMOUNT] per month for services, as set out in Schedule A.] Draws against expected profits are permitted up to [AMOUNT] with approval.

7. MANAGEMENT AND AUTHORITY. Each Partner has an equal vote [or votes in proportion to percentages]. Ordinary decisions require a majority. The following require [unanimous] consent: borrowing or guaranteeing over $[AMOUNT]; contracts over $[AMOUNT]; admitting a new Partner; selling major assets; changing the business; and amending this Agreement. No Partner may bind the Partnership outside the ordinary course of business without required consent.

8. DUTIES. Each Partner will devote [full time / at least [NUMBER] hours per week] to the business, act in good faith, disclose conflicts, and not compete with the Partnership during membership without consent.

9. BOOKS AND BANKING. The Partnership will keep accurate books at its principal office, open to all Partners. Partnership funds will be kept in a separate account; [two signatures] are required for payments over $[AMOUNT].

10. WITHDRAWAL. A Partner may withdraw on [90] days' written notice. The remaining Partners may continue the business and buy the withdrawing Partner's interest under Section 12.

11. DEATH, DISABILITY OR BANKRUPTCY. On a Partner's death, disability for more than [180] days or bankruptcy, the remaining Partners may continue the business and buy the Partner's interest under Section 12.

12. BUYOUT. The purchase price is the Partner's capital account plus share of the fair market value of the business above book value, determined by agreement or an independent appraiser, paid [[20]% at closing and the rest over [36] months with interest at [RATE]%]. The departing Partner will be released from Partnership obligations incurred afterward, and the remaining Partners will seek releases from creditors of existing obligations.

13. DEADLOCK. If the Partners cannot agree on a matter requiring consent, they will mediate for [30] days. If still unresolved, [any Partner may offer to buy out the others at a stated price, and the others must buy or sell at that price].

14. DISSOLUTION. The Partnership dissolves on unanimous agreement, when only one Partner remains, or as required by law. Assets will be sold or distributed to pay creditors, then to return capital accounts, then shared as profits.

15. INDEMNITY. The Partnership will indemnify Partners for liabilities incurred in good faith in its business. A Partner who causes loss through gross negligence, willful misconduct or breach will indemnify the Partnership and other Partners.

16. GOVERNING LAW. This Agreement is governed by the laws of [STATE].

GENERAL PROVISIONS
(a) Notices. Notices must be in writing and sent to the addresses or emails above (or as later updated by notice). Email notice is effective when sent, unless the sender receives a delivery failure message.
(b) Entire agreement. This agreement, with any schedules and exhibits, is the entire agreement between the parties on its subject and replaces all prior discussions and agreements on that subject.
(c) Amendments and waivers. Changes must be in writing and signed by both parties. A failure or delay in enforcing any term is not a waiver of it.
(d) Severability. If any provision is found unenforceable, it will be limited to the minimum extent necessary and the rest of this agreement will remain in effect.
(e) Assignment. Neither party may assign this agreement without the other party's written consent, except to a successor in a merger or sale of substantially all of its business, on notice.
(f) Relationship. Nothing in this agreement creates a partnership, joint venture or agency relationship unless expressly stated.
(g) Counterparts and electronic signatures. This agreement may be signed in counterparts and by electronic signature, each of which is an original and together form one agreement.
(h) Independent advice. Each party has had the opportunity to review this agreement with its own legal counsel and signs it voluntarily.

SCHEDULE A: Partners, contributions, percentages and guaranteed payments
| Partner | Contribution | Percentage | Guaranteed payment |
|---|---|---|---|

PARTNER: ______________________  Date: __________
PARTNER: ______________________  Date: __________

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This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.