Partnership Agreement

A Partnership Agreement is a legal document between you and your partner(s) that outlines the duties and obligations of each partner, both to one another and to the partnership as a whole.

You are not required to file your Partnership Agreement. It is simply an internal agreement between the partners that governs the relationship and responsibilities within the partnership.

Select the province in which the partnership will primarily conduct its business. The laws of the chosen province will be applied to develop this agreement.

You should select a business name that is different from any other existing business.

Most partnerships conclude either by mutual agreement of the partners or due to unforeseen circumstances. However, a fixed term partnership establishes an end date in advance to accommodate specific situations or goals.

A partner can be a person (individual), a corporation, an LLC, or another partnership (business entity).

A Capital contributions could include cash, resources, or services. Provide an accurate description including quantities and amounts.

All partners are important role to your partnership. The Partnership Agreement must be include terms and conditions that protect your partnership from the unexpected withdrawal of a partner.

Upon the dissolution of your partnership, the partnership’s affairs must be settled by winding up, assets liquidated, debts paid, and the surplus divided equally among your partners. If there is only one partner left after a withdrawal, then your partnership must dissolve.

Partners and managers are assumed to have had access to confidential partnership information. After a partner or manager withdraws from the partnership, they should be restricted from using that confidential information to compete directly with the partnership.

You have specified that there are two partners and that no new partners may be admitted. As a result, if one partner departs, the partnership will automatically dissolve.

The fiscal year is the accounting period during which annual financial statements are prepared.

Each partner will need a copy of the federal income tax report to accurately calculate their individual personal income tax.

A managing partner holds an ownership interest in the partnership and is responsible for its overall management as well as the day-to-day operations.

* Certain business decisions can significantly alter the nature of your business, potentially introducing unforeseen risks to your minority partners.
* If applicable to your situation, protections for your minority partners can be included in your Partnership Agreement by requiring a unanimous vote on important decisions.
* Keep in mind that requiring unanimous consent means that each partner has the power to veto any decision.

* Any partner is presumed to have the authority to enter into a contract on behalf of the partnership, provided the contract's subject matter is reasonable in light of the partnership's usual business activities. However, in certain situations, it may be advisable to limit contract-signing authority to a select group of individuals.
* Any variation to the presumed authority of the partners must be communicated to 3rd parties, vendors, and business associates.

A few types of business option involve significant on new risk. To protect the interests of all partners, some of your business decisions should require the consent of all partners.

If it becomes evident that money owed to your partnership will never be collected in full, any waiver or release of significant debt owed to the partnership should be agreed upon by all partners.

* Do not use several names or words to refer to the same person or thing as it could cause confusion and ambiguity by appearing to introduce new or different people or items.
* Certain words were capitalized and defined already in this Agreement. For example, a partner is called the Partner. Use the same predefined terms in your additional clauses.
* Do not use pronouns such as: they, us, we, our, you, or me. Pronouns may be ambiguous and can cause confusion. e.g.:

• Wrong: If a Partner's ownership interest becomes available for sale, we have a right to first purchase.
• Right: If a Partner's ownership interest becomes available for sale, the remaining Partners have a right to first purchase.

* It is not required that you have someone witness the signing of your Partnership Agreement for it to be legally valid. But it is still a good idea if the execution of your agreement is ever challenged.
* A witness should be a neutral third party who has no personal or business relationship with you or any of your partners.