PARTNERSHIP AGREEMENT
This PARTNERSHIP
AGREEMENT is made on ____________, 20__ between
__________________________________________ and
__________________________________________ of _____________________.
1. NAME AND
BUSINESS. The parties hereby form a partnership under the name of
__________________________________________ to conduct a
__________________________________________. The principal office of the
business shall be in _______________________.
2. TERM.
The partnership shall begin on ________________, 20____, and shall continue
until terminated as herein provided.
3. CAPITAL.
The capital of the partnership shall be contributed in cash by the partners as
follows: A separate capital account shall be maintained for each partner.
Neither partner shall withdraw any part of his capital account. Upon the demand
of either partner, the capital accounts of the partners shall be maintained at
all times in the proportions in which the partners share in the profits and
losses of the partnership.
4. PROFIT AND LOSS.
The net profits of the partnership shall be divided equally between the
partners and the net losses shall be borne equally by them. A separate income
account shall be maintained for each partner. Partnership profits and losses
shall be charged or credited to the separate income account of each partner. If
a partner has no credit balance in his income account, losses shall be charged
to his capital account.
5. SALARIES AND
DRAWINGS. Neither partner shall receive any salary for services
rendered to the partnership. Each partner may, from time to time, withdraw the
credit balance in his income account.
6. INTEREST.
No interest shall be paid on the initial contributions to the capital of the
partnership or on any subsequent contributions of capital.
7. MANAGEMENT
DUTIES AND RESTRICTIONS. The partners shall have equal rights in the
management of the partnership business, and each partner shall devote his
entire time to the conduct of the business. Without the consent of the other
partner neither partner shall on behalf of the partnership borrow or lend
money, or make, deliver, or accept any commercial paper, or execute any
mortgage, security agreement, bond, or lease, or purchase or contract to
purchase, or sell or contract to sell any property for or of the partnership
other than the type of property bought and sold in the regular course of its
business.
8. BANKING.
All funds of the partnership shall be deposited in its name in such checking
account or accounts as shall be designated by the partners. All withdrawals
therefrom are to be made upon checks signed by either partner.
9. BOOKS.
The partnership books shall be maintained at the principal office of the
partnership, and each partner shall at all times have access thereto. The books
shall be kept on a fiscal year basis, commencing _____________________ and
ending _____________________, and shall be closed and balanced at the end of
each fiscal year. An audit shall be made as of the closing date.
10. VOLUNTARY
TERMINATION. The partnership may be dissolved at any time by agreement
of the partners, in which event the partners shall proceed with reasonable
promptness to liquidate the business of the partnership. The partnership name
shall be sold with the other assets of the business. The assets of the
partnership business shall be used and distributed in the following order: (a)
to pay or provide for the payment of all partnership liabilities and
liquidating expenses and obligations; (b) to equalize the income accounts of the
partners; (c) to discharge the balance of the income accounts of the partners;
(d) to equalize the capital accounts of the partners; and (e) to discharge the
balance of the capital accounts of the partners.
11. DEATH.
Upon the death of either partner, the surviving partner shall have the right
either to purchase the interest of the decedent in the partnership or to
terminate and liquidate the partnership business. If the surviving partner
elects to purchase the decedent's interest, he shall serve notice in writing of
such election, within three months after the death of the decedent, upon the
executor or administrator of the decedent, or, if at the time of such election
no legal representative has been appointed, upon any one of the known legal
heirs of the decedent at the last-known address of such heir. (a) If the
surviving partner elects to purchase the interest of the decedent in the
partnership, the purchase price shall be equal to the decedent's capital
account as at the date of his death plus the decedent's income account as at
the end of the prior fiscal year, increased by his share of partnership profits
or decreased by his share of partnership losses for the period from the
beginning of the fiscal year in which his death occurred until the end of the
calendar month in which his death occurred, and decreased by withdrawals
charged to his income account during such period. No allowance shall be made
for goodwill, trade name, patents, or other intangible assets, except as those
assets have been reflected on the partnership books immediately prior to the
decedent's death; but the survivor shall nevertheless be entitled to use the
trade name of the partnership. (b) Except as herein otherwise stated, the
procedure as to liquidation and distribution of the assets of the partnership
business shall be the same as stated in paragraph 10 with reference to
voluntary termination.
12. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, or the
breach hereof, shall be settled by arbitration in accordance with the rules,
then obtaining, of the American Arbitration Association, and judgment upon the
award rendered may be entered in any court having jurisdiction thereof. In
witness whereof the parties have signed this Agreement.
Executed this
______________ day of _________________, 20_____ in _____________________
[CITY], _____________________ [STATE].
_______________________________________________________
_______________________________________________________