Business Partnership Agreement Attorney Alexandria VA
Like a personal partnership agreement, people in a business collaboration need to have communicated understandings. But in business, the understandings need to be in writing.
Suppose a dispute arises between the partners; if something happens to a partner; or there is a change in partnership, there needs to be clarity on what next.
A business agreement is the best way to ensure that the business survives in case of anything.
What is a Partnership Agreement?
It is a contract between partners in a partnership which sets out the terms and conditions to the relationship between the partner. It stipulates:
- Percentage of ownership and profit distribution of profit and losses
- Describes the management powers and duties of each partner
- Term (Length) of the partnership
- How to terminate the partnership
- How a partner can buy his/her share of the partnership
Before starting a partnership, you should formulate a partnership agreement. You’ll need a Business lawyer to help you create an agreement to ensure you leave no essentials out.
Why is Partnership Agreement Important?
Typically, an agreement aims at dealing with nearly all possible situations—confusion, disagreement, or change, which might affect a partnership in the future.
Let’s dig a little deeper into its importance.
- It sets up the roles and responsibility of each partner
- Describes the decision-making process in a partnership
- It spells out the tax status of the partnership—showing that the partnership distributes profit based on the acceptable tax and accounting practices
- It states the liabilities of individual partners
- Speaks out how to deal with changes in the partnership due to life challenges of partners—partners who leave, become ill, get divorced, die or just get incompetent
- Describes the circumstances under which new partners can enter the partnership
- Explains how to deal with conflict of interest and non-compete agreements
- To override state laws
Do you need a Lawyer to help you?
The simplest answer to that question is probably yes. A DIY partnership agreement risks the inclusion of incorrect wording. And a wrongly worded contract is worse than none at all. Give us a call today or fill the form below today.