Partnership Agreements

CGM_2

Hello everyone,

I was hopeing somebody might be able to help. I am in the process of starting a small business with a goof friend of mine, we want to get a formal partnership agreement written up to aviod problems further down the line. But not exactly sure the best way to go about it. I know we could go to the solicitor but they would charge alot.

I've seen sites on the internet which offer a template for a set fee normally around £20-30.

Does anyone have any advice or guidance on methods that they have used in the past.

Any help would be appreciated, i'm quite happy to go to the solicitors and get them to write it up if that is the only option, just i'd prefer to ivestigate other options before sending out money on solicitors time.

REgards

CGM

Mark7799

There are a few different sites that offer guidance on what should be included in partnership agreements but you will need to consider what your requirements are.

I've pasted one list here but it can't claim to be exhaustive - it's more of a brainstorming session and legal advice at the outset may save a lot of possible heartache in the future. A partnership agreement is like a will - no-one likes talking about them but if they are in place then they can save a lot of heartache if/when they are needed to be called upon.

1. Duration of the Partnership - Depending on the size of the partnership, the Firm would continue provided there were two or more partners remaining.

2. Firm Location - There needs to be some certainty as to where the Firm will operate from, and you also need to be certain as to what terms the Firm, individual partners or a landlord owns/rents the property to you.

3. Partnership Capital - You need to ensure that everybody knows what contributions are expected from them.

4. Drawings - You need to understand what everybody is entitled to take out of the Firm.

5. Partnership Property - This clause should specify exactly what belongs to the Firm and, in particular, whether the premises are included.

6. Partners Personal Liabilities - This provision would detail particular obligation which partners needed to fulfil to properly carry out their duty (e.g. maintaining driving licence, professional qualifications and on-going training).

7. Partnership Expenses - Details of the proper expenses of the Firm (fees for professional bodies, insurance etc).

8. Bankers - This clause will identify both the Bankers and cheque signing authority.

9. Partnership Earnings and Receipts - You need understand which monies you receive that need to be accounted for (e.g. lecture work, legacies/gifts).

10. Profits and Losses - This provision will make it clear how profits and losses are to be apportioned between the partners.

11. Decisions, Voting and Deadlock - This will address the formal running of the Firm.

12. Partners' Duties/Restrictions - This clause will set out the Partners' duty of good faith to the Firm and his/her obligation not to indulge in any competing Firm etc

13. Other work - Consent of other partner(s) required to carry out non-Firm work.

14. Partners Residence - An obligation to live close to the Firm.

15. Holiday/Sabbatical Leave - Permitted holiday and extended sabbatical leave.

16. Maternity Leave - Appropriate arrangements for female partners and this might also be extended to paternity leave.

17. Superannuation - The division between partners.

18. Absence - Engagement of a locum or others and provisions dealing with sickness.

19. Retirement from the Partnership - Details of the retirement procedure and valuation of the partners' shares.

20. Compulsory Retirement - Grounds whereby a partner can be excluded from the Partnership.

21. Option to Acquire Outgoing Partner's Share - Provision for dealing with an outgoing partner's share.

22. Obligation on Leaving the Partnership - This will include obligations to continue to maintain specified duties and run-off insurance.

23. Valuation - Provisions dealing with the valuation of the Firm or a Partner's share of it.

pin

Hi

I may be able to dig up an old partnership agreement and some other information on setting up a partnership. Can you PM me though.

jazzyjustlaw

I know you think I might be biased but I would approach a Solicitor they might just charge you a flat rate for this instead of actual time you know like preparing a Will or a conveyance. I am not sure.

I would say though that there are a lot of things to go into a Partnership Agreement which can save time and money later on. I would want a Solicitor to have a look over it to make sure it is water tight if there are any problems later on you have some come back!

jmarko

I agree with Jazzy - but I am also biased!

A tightly drafted partnership agreement will save you a lot of hassle (and money) in the long run.

jmarko

WHA

1. Make sure that you have discussed and agreed with your fellow partners exactly what will happen if one of you dies, retires, leaves, etc.

2. Make sure that you have discussed and agreed who does what, how much time each is expected to put in, how much money to be put in.

Once you have those basics understood and agreed, you can start talking to a solicitor about having these put into a proper legal agreement. I wouldn't advise talking to a solicitor too soon as you may end up with a standard partnership agreement that doesn't actually say what you want it it.

tinalives

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