Free Partnership Agreement Template

A partnership agreement is a contract between two or more people who run a business together. It outlines how the company operates, how profits are shared, and what happens if a partner leaves.

Without a written agreement, your business will default to state laws, usually based on the Uniform Partnership Act (UPA) or Revised UPA (RUPA). These laws may not reflect your intentions. For example, profits are often split equally by default, even if one partner contributes more time or money.

Creating your own agreement lets you set terms that fit your business and avoid costly misunderstandings later.

A strong partnership agreement should cover the basics of how your business will operate and what each partner is responsible for. Common terms include:

• Partner information: Full names and addresses of each partner
• Business name and purpose: What your partnership is called and what it does
• Location: Where the business operates
• Start date and duration: When the agreement begins and how long it lasts
• Capital contributions: What each partner invests (cash, property, services)
• Ownership shares: How much of the business each partner owns
• Profits and losses: How earnings and debts will be split
• Management: Who handles operations, and how decisions are made
• Banking and records: Where funds are held and how records are kept
• Partner changes: What happens if someone leaves, retires, or passes away
• Buyout terms: How a partner’s share is valued and purchased
• Disputes: How conflicts will be resolved
• Governing law: Which state’s laws apply

A clear, well-structured agreement helps avoid misunderstandings and sets your business up for success. With Document Genius, you can customize each section step by step, so you and your partners know exactly where you stand from day one.

1. Identify the Partnership

List all partners with full names and addresses. Add the agreement’s effective date and the state laws that will govern it.

2. Set the Name, Purpose, and Office Location

Define your business name, describe the services or products you’ll offer, and specify your business location.

3. Choose the Term

Decide how long the partnership will last, whether it is ongoing or ending, on a set date or event.

4. Outline Capital Contributions

Detail what each partner is contributing, cash, property, or services, and when these contributions are due.

5. Establish Capital Accounts

Each partner should have a capital account showing their investment. State whether contributions earn interest and if withdrawals require approval.

6. Set Profit and Loss Terms

Explain how profits and losses will be divided: equally, based on contributions, or using a custom split.

7. Add Salary and Draw Rules

Note whether any partner receives a salary and when partners can withdraw profits from the business.

8. Define Banking and Recordkeeping

List the financial institution and who has the authority to manage funds. Explain where records will be kept and how often reports will be prepared.

9. Clarify Management and Decision-Making

Explain how day-to-day operations are handled and what decisions need majority or unanimous consent, like taking out loans or signing big contracts.

10. Plan for Partner Withdrawal or Removal

Set rules for what happens if a partner wants to leave or must be removed, including notice periods and buyout options.

11. Cover Retirement, Death, or Dissolution

Outline what happens if a partner retires or passes away. Will the remaining partners continue or dissolve the business?

12. Define Buyout Terms

Explain how a departing partner’s share will be valued and who pays. You can base this on fair market value or account balances.

13. Add Transfer and New Partner Restrictions

Limit the ability to transfer ownership without approval. Set rules for admitting new partners.

14. Set a Dispute Resolution Method

Choose how conflicts will be handled, such as through arbitration, and which state’s courts have jurisdiction.

15. Finalize and Sign

Include any final clauses (e.g., confidentiality, amendments, notices), then have each partner sign and date the agreement.

While an agreement does not necessarily have to be notarized, notarization can provide security, credibility, and legal protection. Notarization should be used when the partnership is complex.