Partnership Agreements Solicitors, York, Wetherby & Malton
To ensure a solid foundation for your partnership, having a fair and effective partnership agreement in place is essential.
Entering into a business is an exciting proposition, but it is necessary that the respective parties' duties and obligations are clearly set out to avoid problems arising in the future.
With a long history of working with commercial clients across Yorkshire, Ware & Kay can advise on matters such as:
- Drafting partnership agreements
- Partnership conversions
- Departures and restructuring
- Acquisitions, mergers and disposals of partnerships
- Liquidation and insolvency of partnerships
What is a partnership agreement?
When two or more parties decide to come together for the purposes of doing business they can so in four ways, - a company, joint venture, limited liability partnership ( LLP) or a partnership. A partnership is a binding legal contract which is agreed between the parties to regulate the way the business will be run and the relative contributions in terms of time and money and skills that each partner will bring and how profits and losses will be shared between the partners.
Unfortunately, disputes can sometimes arise between partners. A partnership agreement can provide clarity if issues emerge further down the line, as well as allowing the business to continue running efficiently despite disagreement between those in charge.
What are the crucial points to consider when creating a partnership agreement?
Every partnership is different, and as such, the document that establishes the partnership should reflect the specific requirements of the business. However, certain factors should be considered for all partnership agreements:
Partnerships can last for a fixed period or, in some cases, will continue for the lifetime of the partners. Choosing how and when a partnership will end is an important consideration – you may agree that the handing in of notice by one partner brings it to an end, or that it will continue if the other partners wish it to.
It is essential to consider how assets, such as business premises, will be shared and used. It might make sense for individual partners to hold particular assets, or for each partner to have an equal share in each.
The partnership agreement should state the funding to be contributed by each partner. If further capital is required to keep the partnership solvent, how much the individual partners will contribute should also be detailed.
Profits and losses
How the partners will share profits and losses is one of the principal matters to be addressed in a partnership agreement. At what point the partners can withdraw money is also of great importance.
This includes how decisions are made within the partnership, such as the voting rights of each partner. Another key consideration is what should happen if disputes arise in the future.
Contact our Commercial Team in Yorkshire
Here at Ware & Kay our Commercial Team are on hand to provide business clients with a comprehensive service when it comes to drafting new and amending existing partnership agreements. From the outset, our commercially minded team of solicitors will provide guidance that is clear, pragmatic and strategic in pursuit of your business objectives.