Why do I need a partnership 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.