Business Structure, Liability, and Partnership Agreement

Project

Partnership Agreement

Partnership Agreement - Week Five

[STUDENT NAME]

ITT Tech Online

BU2760–Business Law

Dr. Smith

[TODAY’S DATE] January 30, 2013 1

Project

Partnership Agreement

PARTNERSHIP AGREEMENT (NAME), and (NAME), the below signed hereby enter into this Partnership Agreement on behalf of themselves, their

heirs, successors and assigns, and set forth following terms and conditions as constituting the Partnership

Agreement in its entirety:

1. The partnership shall go by the following name: (NAME).

2. The partnership's principle place of business shall be (DESCRIBE).

3. The first day that the partnership shall begin business is: (DATE) and it will continue until the partners agree

to terminate it or until forced to cease its operations by law.

4. The partnership's operations shall be primarily in the following field or area: (DESCRIBE)

5. The partnership shall be capitalized as follows: For each $ (AMOUNT) (dollars) each partner shall receive (#)

shares with contribution being made as follows:

Partner A contributes $(AMOUNT) and shall receive (#) shares, the same being (#) % of the total shares available. Partner B contributes $(AMOUNT) and shall receive (#) shares, the same being (#) % of the total shares available. 6. Losses and gains on contributed capital and other property shall be assigned as follows: (DESCRIBE) The IRS's general allocation rule shall apply, and gains and losses shall be allocated according to the % of total

capital contributed by each partner as set out in paragraph 5 above.

7. Profits and losses shall be allocated according to the same percentage allocation set forth in paragraph #6 above.

8. Salary, if any, for the services rendered shall be determined by unanimous approval of the partners.

2

Project

Partnership Agreement 9. Control and management of the partnership shall be split equally amongst the partners.

10. Each partner shall maintain both an individual drawing account and an individual capital account. Into the

capital account shall be placed that partner's initial capitalization and any increases thereto. The drawing accounts

shall be used for withdrawal of amounts, the size of which is limited to $(AMOUNT) on any one day.

11. Adequate accounting records shall be made and maintained. Any partner or his/her agent may review any and

all accounting or other records at anytime.

12. The partners designate the following as the Partnership's business and checking accounts into which all the funds

of the Partnership shall be placed and maintained: (DESCRIBE)

13. Accounting records and books shall be kept on a (select one) 1. cash basis 2. accrual basis and the fiscal year

shall begin on the (#) day of (MONTH) and shall end (#) day of (MONTH).

14. At the close of the fiscal year, there shall be an annual audit conducted by the following accounting

firm: (DESCRIBE)

15. The partnership shall dissolve upon the retirement, death, or incapacity of any partner unless the remaining

partner elects the option of buying out that partner's share. (DESCRIBE THE DETAILS)

16. Upon termination or dissolution of the Partnership, the Partnership will be promptly liquidated, with all

debts being paid first, prior to any distribution of the remaining funds. Distribution shall be made according to

the percentage of ownership as set out in paragraph #5 above.

17. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by

arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and

judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

3

Project

Partnership Agreement So agreed, this (#) day of (MONTH), 20 . ________________________ (NAME) ________________________ (NAME)

Review - make sure the following items are included in this agreement!

I. Detailed description of the business

II. Names of the partners

III. Address of the partnership and the partners

IV. Roles of each of the partners—be as complete and detailed as possible

V. List of assets provided by each partner

VI. Division of income

VII. Division of partnership liabilities (debts)

VIII. Method by which the partnership may be dissolved

4

Project

Partnership Agreement

References Cheeseman, H. R. (2010). Business law (Custom 7th ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Lectlaw.com. (n.d.). Partnership agreement form. Lectlaw.com. Retrieved from

http://www.lectlaw.com/forms/f086.htm

5