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Partnership Agreement

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Definition: A partnership agreement is a contract between partners in a partnership which sets out the terms and conditions of the relationship between the partners, including:
  • Percentages of ownership and distribution of profits and losses
  • Description of management powers and duties of each partner
  • Term (length) of the partnership
  • How the partnership can be terminated
  • How a partner can buy his/her share of the partnership.

A partnership agreement should be prepared by an attorney so as to include all important "what if" questions and avoid problems when the partnership ends.

Read more about all the terms a partnership agreement should contain in "Partnership Agreement Terms."

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