Why do I need a partnership agreement?
A description of the benefits of creating a Partnership agreement and the effects on your business of not having a documented agreement
While there is no legal requirement for a partnership to put a partnership agreement in place, the majority do tend to use them to define specific details of their partnership, such as:
- Varying degrees of capital contributed
- Profit (and loss) sharing
- How the business will be run
- The amount partners can withdraw from the business
- The procedure should a partner become ill, die or want to leave the partnership for any other reason
- The procedure for introducing new partners
Start your partnership agreement now
A partnership can be formed by two or more people agreeing to form a partnership. However, without a partnership agreement, the business will be governed by the Partnership Act of 1890, which may produce unforeseen or undesirable results, particularly if there is a future disagreement between partners.
The information on this page applies to England and Wales only.
Related products