THIS PARTNERSHIP AGREEMENT
("Agreement") made and effective this [Date], by and between
the following individuals, referred to in this Agreement as the "Partners":
The Partners wish to set forth, in a written
agreement, the terms and conditions by which they will associate themselves
in the Partnership.
NOW, THEREFORE, in consideration
of the promises contained in this Agreement, the Partners affirm in writing
their association as a partnership in accordance with the following provisions:
1. Name and Place of Business.
The name of the partnership shall be called __________ (the "Partnership").
Its principal place of business shall be ___Address___, until changed
by agreement of the Partners, but the Partnership may own property and
transact business in any and all other places as may from time to time
be agreed upon by the Partners.
The purpose of the Partnership shall be to ___Business Description___.
The Partnership may also engage in any and every other kind or type of
business, whether or not pertaining to the foregoing, upon which the Partners
may at any time or from time to time agree.
The Partnership shall commence as of the date of this Agreement and shall
continue until terminated as provided herein.
4. Capital Accounts.
A. The Partners shall make an initial investment
of capital, contemporaneously with the execution of this Agreement,
In addition to each Partner's share of
the profits and losses of the Partnership, as set forth in Section 5,
each Partner is entitled to an interest in the assets of the Partnership.
B. The amount credited to the capital account
of the Partners at any time shall be such amount as set forth in this
Section 4 above, plus the Partner's share of the net profits of the
Partnership and any additional capital contributions made by the Partner
and minus the Partner's share of the losses of the Partnership and any
distributions to or withdrawals made by the Partner. For all purposes
of this Agreement, the Partnership net profits and each Partner's capital
account shall be computed in accordance with generally accepted accounting
principles, consistently applied, and each Partner's capital account,
as reflected on the Partnership federal income tax return as of the
end of any year, shall be deemed conclusively correct for all purposes,
unless an objection in writing is made by any Partner and delivered
to the accountant or accounting firm preparing the income tax return
within one (1) year after the same has been filed with the Internal
Service. If an objection is so filed, the
validity of the objection shall be conclusively determined by an independent
certified public accountant or accounting firm mutually acceptable to
5. Profits and Losses.
Until modified by mutual consent of all the Partners, the profits and
losses of the Partnership and all items of income, gain, loss, deduction,
or credit shall be shared by the Partners in the following proportions:
||partner share here
6. Books and Records of Account.
The Partnership books and records shall be maintained at the principal
office of the Partnership and each Partner shall have access to the books
and records at all reasonable times.
7. Future Projects.
The Partners recognize that future projects for the Partnership depend
upon many factors beyond present control, but the Partners wish to set
forth in writing and to mutually acknowledge their joint understanding,
intentions, and expectations that the relationship among the Partners
will continue to flourish in future projects on similar terms and conditions
as set forth in this Agreement, but there shall be no legal obligations
among the Partners to so continue such relationship in connection with
8. Time and Salary.
Until and unless otherwise decided by unanimous agreement of
the Partners, [Time Commitment]. Each Partner shall nonetheless be expected
to devote such time and attention to Partnership affairs as shall from
time to time be determined by agreement of the Partners. No Partner shall
be entitled to any salary or to any compensation for services rendered
to the Partnership or to another Partner.
9. Transfer of Partnership Interests.
A. Restrictions on Transfer. None of the
Partners shall sell, assign, transfer, mortgage, encumber, or otherwise
dispose of the whole or part of that Partner's interest in the Partnership,
and no purchaser or other transferee shall have any rights in the Partnership
as an assignee or otherwise with respect to all or any part of that
Partnership interest attempted to be sold, assigned, transferred, mortgaged,
encumbered, or otherwise disposed of, unless and to the extent that
the remaining Partner(s) have given consent to such sale, assignment,
transfer, mortgage, or encumbrance, but only if the transferee forthwith
assumes and agrees to be bound by the provisions of this Agreement and
to become a Partner for all purposes hereof, in which event, such transferee
shall become a substituted partner under this Agreement.
B. Transfer Does Not Dissolve Partnership.
No transfer of any interest in the Partnership, whether or not permitted
under this Agreement, shall dissolve the Partnership. No transfer, except
as permitted under Subsection 9.A. above, shall entitle the transferee,
during the continuance of the Partnership, to participate in the management
of the business or affairs of the Partnership, to require any information
or account of Partnership transactions, or to inspect the books of account
of the Partnership; but it shall merely entitle the transferee to receive
the profits to which the assigning Partner would otherwise be entitled
and, in case of dissolution of the Partnership, to receive the interest
of the assigning Partner and to require an account from the date only
of the last account agreed to by the Partners.
10. Death, Incompetency, Withdrawal,
Neither death, incompetency, withdrawal, nor bankruptcy of any of the
Partners or of any successor in interest to any Partner shall operate
to dissolve this Partnership, but this Partnership shall continue as set
forth in Section 3, subject, however, to the following terms and conditions:
A. Death or Incompetency.
In the event any Partner dies or is declared incompetent by a court of
competent jurisdiction, the successors in interest of that Partner shall
succeed to the partnership interest of that Partner and shall have the
rights, duties, privileges, disabilities, and obligations with respect
to this Partnership, the same as if the successors in interest were parties
to this Agreement, including, but not limited to, the right of the successors
to share in the profits or the burden to share in the losses of this Partnership,
in the same manner and to the same extent as the deceased or incompetent
Partner; the right of the successors in interest to continue in this Partnership
and all such further rights and duties as are set forth in this Agreement
with respect to the Partners, the same as if the words "or his or
her successors in interest" followed each reference to a Partner;
provided, however, that no successor in interest shall be obligated to
devote any service to this Partnership and, provided further, that such
successors in interest shall be treated as holding a passive, rather than
active, ownership investment.
B. Payments Upon Retirement or Withdrawal
(1) Amount of Payments. Upon the retirement
or withdrawal of a Partner, that Partner or, in the case of death or
incompetency, that Partner's legal representative shall be entitled
to receive the amount of the Partner's capital account (as of the end
of the fiscal year of the Partnership next preceding the day on which
the retirement or withdrawal occurs) adjusted for the following:
(i) Any additional capital contributions
made by the Partner and any distributions to or withdrawals made by
the Partner during the period from the end of the preceding fiscal
year to the day on which the retirement or withdrawal occurs;
(ii) The Partner's share of profits and
losses of the Partnership from the end of the preceding fiscal year
of the Partnership to the day on which the retirement or withdrawal
occurs, determined in accordance with generally accepted accounting
principles, consistently applied; and
(iii) The difference between the Partner's
share of the book value of all of the Partnership assets and the fair
market value of all Partnership assets, as determined by a fair market
value appraisal of all assets. Unless the retiring or withdrawing
Partner and the Partnership can agree on one appraiser, three (3)
appraisers shall be appointed--one by the Partnership, one by the
retiring or withdrawing Partner, and one by the two appraisers thus
appointed. All appraisers shall be appointed within fifteen (15) days
of the date of retirement or withdrawal. The average of the three
appraisals shall be binding on all Partners.
(2) Time of Payments. Subject to a different
agreement among the Partners or successors thereto, the amount specified
above shall be paid in cash, in full, but without interest, no later
than twelve (12) months following the date of the retirement or withdrawal.
(3) Alternate Procedure. In lieu of purchasing
the interest of the retiring or withdrawing Partner as provided in subparagraph
(1) and (2) above, the remaining Partners may elect to dissolve, liquidate
and terminate the Partnership. Such election shall be made, if at all,
within thirty (30) days following receipt of the appraisal referred
11. Procedure on Dissolution of Partnership.
Except as provided in Section 10.B.(3) above, this Partnership may be
dissolved only by a unanimous agreement of the Partners. Upon dissolution,
the Partners shall proceed with reasonable promptness to liquidate the
Partnership business and assets and wind-up its business by selling all
of the Partnership assets, paying all Partnership liabilities, and by
distributing the balance, if any, to the Partners in accordance with their
capital accounts, as computed after reflecting all losses or gains from
such liquidation in accordance with each Partner's share of the net profits
and losses as determined under Section 5.
12. Title to Partnership Property.
If for purposes of confidentiality, title to Partnership property is taken
in the name of a nominee or of any individual Partner, the assets shall
be considered to be owned by the Partnership and all beneficial interests
shall accrue to the Partners in the percentages set forth in this Agreement.
All leases of Partnership assets shall be in writing and on forms approved
by all the Partners.
14. Controlling Law.
This Agreement and the rights of the Partners under this Agreement
shall be governed by the laws of the State of ___State___.
Any written notice required by this Agreement shall be sufficient if sent
to the Partner or other party to be served by registered or certified
mail, return receipt requested, addressed to the Partner or other party
at the last known home or office address, in which event the date of the
notice shall be the date of deposit in the United States mails, postage
This Agreement contains the entire agreement of the Partners with respect
to the Partnership and may be amended only by the written agreement executed
and delivered by all of the Partners.
17. Binding Upon Heirs.
This Agreement shall bind each of the Partners and shall inure to the
benefit of (subject to the Sections 9 and 10) and be binding upon their
respective heirs, executors, administrators, devisees, legatees, successors
IN WITNESS WHEREOF, the
Partners have executed this Agreement the date first above written.