Free Partnership Agreement Templates in Word (Printable & Editable)

Download these Free Partnership Agreement Templates to help you write down your Partnership Agreement effectively. I am sure you would also like to check out our Employee Non-Compete Agreement Templates Collection.

A single person can likely run a big company or organization. Even if he somehow manages to perform all responsibilities for a while, he will need to add some other partners in the business to help him out. This partnership can be temporary i.e. for a year or 3 years or it can go on as long as the company exists.

When such a situation happens, a business includes new partners in the company for any reason. The partnership agreement is created and signed by the existing owners or partners of the company and the new partners. This is an essential document. It is obvious that without this agreement, the partnership is not possible to occur as either the company or the new partners won’t allow entering into a company without a legal document i.e. partnership agreement.

Brief Description of Partnership Agreement:

If you are one of those who think of partnership and joint venturing as the same thing, you are wrong. In reality, the partnership is completely different from joint venturing in many aspects. For example, unlike joint venturing, the partnership is supposed to last as long as the company exists. Also, unlike joint venturing, partners have more rights and better ownership in the company but the partnership also comes with great responsibilities and a lot to lose on both ends. This is why when a company decides to enter a new partner in the business on a long-term basis, they consider it very important and go through every aspect thoroughly so that nothing is missed and every element is covered with the legal documents and agreements.

The agreement written and signed between the new and existing partners or owners of the company is known as the partnership agreement. This is a very important legal document. If the partners are supposed to share the profit in the business, they are also responsible for the operations and conflicts in the company. The partnership agreement usually includes information about the partners, the legal rights of each partner, a form of partnership, profit sharing or ownership rights of each partner in the business, and the legal value of each partner in the business.

Free Partnership Agreement Templates

Here is a good-looking and well-drafted Strategic Partnership Agreement Sample that can assist you in preparing your agreement easily. Downloading this sample agreement, you can study and develop a useful version as per your requirements.

 

Common Mistakes in a Partnership Agreement

Just like putting a foundation to your house, forming a partnership can build a strong base for your business and hence propel it into a more stable future. Most times, what is more exciting about having a partner in the business is that one gets to spend less time brooding over an elaborate, exacting, and hence generally less-than-exciting partnership document. Underspecifying important points or vague terms may result in misunderstandings, quarrels, and sometimes, even financial losses. These are some of the most common mistakes people make when creating a partnership agreement.

Missing Key Elements in the Agreement

In partnership agreements, it’s a common mistake for people not to specify the roles or duties of each partner. When this — lack of definition — happens, the issue of who does what can become confusing. For example, Partner A may think that Partner B is responsible for money issues while Partner B assumes that it is Partner A who manages them and nobody does anything about it.

Money arguments are hard on partnerships. Expectations among partners can differ without clear provisions of a revenue distribution formula. Consequently, in one instance, a partner may claim a right to a bigger portion because he or she believes that his/her input is more significant compared to others, leading to bitterness.

Every now and then, disagreements arise within a partnership. Without some established modality of solving such disagreements, they may blossom into serious legal tussles. A mediation or arbitration clause, therefore, serves as an avenue for navigation in the case of a carnal clash.

Partnership often begins with different persons making different and unique contributions in terms of money, knowledge, or time allocations. In equal paying partners they end up misunderstanding each other if they don’t take into account these variations at an early stage. For proper expectation setting and future prevention of grudges, it is essential that every party gives a clear description of his/her role in the project as well as resource availabilities.

Ignoring Legal Requirements

The partnership laws may differ according to state or country and so if you fail to comply with them, you could have your agreement nullified. For instance, some jurisdictions require that certain terms must be expressly provided for within the agreement to be considered valid. If these laws are ignored, your enterprise risks being endangered.

Crafting business documents on your own increases the probability of missing important legal details. Consult professional legal advice when creating a partnership agreement to avoid costly errors in the future.

Neglecting to Plan for Future Scenarios

Partnerships are often transient in nature. Retirement, differences of opinion, or changing market conditions can bring partners together in one instance and part them in another. Absent an exit strategy, disentanglement from a partnership may become a very trying experience.

What happens to his share if one of the partners cannot continue? It is because of disputes among surviving partners or heirs, thereby risking the business that happens in absence of succession planning.

Scaling a business by admitting new partners or increasing investments is a provision in partnership agreements that is often ignored. This oversight has the capacity to hamper the opportunities for growth.