Setting up a partnership agreement
A partnership occurs when two or more people carry on business in the view of making a profit. The Partnership Act 1890 or Limited Liabilities Partnership Act 2000 dictates the terms of the general partnership or LLP when there is no agreement between partners and members as to the management of the business. Ralli Partnership Law strongly suggests that all partnerships put in place a clear partnership agreement. This deed allows partnerships to amend the terms set out in the Partnership Act 1890 or Limited Liability Partnership Act 2000 so that the partnership is correctly regulated to the required legal standards. Failing to establish a strong partnership agreement can lead to a number of issues and threaten the very existence of your partnership, which is just one reason why it is absolutely vital to establish a written agreement early on in the partnership.
Why have a partnership agreement?
If you do not agree on a partnership agreement, your partnership will be governed by the provisions of the Partnership Act 1890 or, in the case of an LLP, the Limited Liability Partnership Act 2000. This can restrict the way your business is run, as the terms do not deal with the specific needs of most partners or members. For example, under the 1890 Partnership Act:
- Partners cannot be expelled
- A partner cannot be introduced without the consent of all members
- The partnership can be terminated on notice
These issues can be prevented through the construction of a strong and expertly put together partnership agreement, put together to ensure that your business can focus on making a profit, rather than dealing with challenging legal issues.
Increased control over partnership issues
Whether a partnership agreement or LLP partnership agreement is required, both instances offer increased control over the members of a partnership, allowing for changes to be made without a lengthy legal challenge. Most deeds deal with the partnership name, duration and the initial capital contributions. They also allow you to deal with the division of profits and losses, your management structure, retirement from partnership, dissolution, expelling partners, restrictive covenants and the termination of your partnership.
Creating your partnership deed
Whether you are in a general partnership and limited liability partnership, contact us on 0161 832 6131 in order to set up a well-constructed LLP or partnership agreement. Experienced in creating partnership agreements and LLP deeds for a wide variety of business situations, our specialist partnership law solicitors can draft up deeds that deal with your specific requirements.