When should I use a partnership agreement?

Use a partnership agreement when two or more people or companies will carry on a business as co-owners for profit and need written rules for contributions, profits, votes, and exit. It is not a joint venture for a single project, and it is not an employment contract. Sources: IRS: Partnerships (https://www.irs.gov/businesses/partnerships).

Partnership or joint venture?

A partnership is an ongoing business carried on by co-owners for profit. A joint venture agreement (https://www.formabledocs.com/templates/joint-venture-agreement) is usually a limited collaboration while each party keeps its own company. Sources: IRS: Partnerships (https://www.irs.gov/businesses/partnerships).

What sources shape this partnership agreement?

The sample follows the Uniform Partnership Act (1997) from the Uniform Law Commission (https://www.uniformlaws.org/committees/community-home?CommunityKey=52456941-7883-47a5-91b6-d2f086d0bb44), including ordinary-course agency and a buyout if a partner withdraws rather than an automatic wind-up. This is a starting point, not a state-specific filing.

Can I download this partnership agreement template?

Yes. Use Download .docx to get a Word file with placeholders such as [Party A] and [Effective Date]. You can edit it in Word or Google Docs, or create a filled-in version in the free contract creator (https://www.formabledocs.com/contract-creator/partnership-agreement).

Is the sample legally binding as shown?

No. Placeholder sample text is a starting point. It becomes an agreement for your deal after you fill in the details—manually or in the free contract creator—and the parties sign. Sources: IRS: Partnerships (https://www.irs.gov/businesses/partnerships).

When should I use the free contract creator instead of editing the file?

Use the free contract creator if you want guided choices for who you are, the business purpose, contributions, ownership split, decision rules, and governing law, without hunting through every blank yourself.

Partnership Agreement

Ownership, contributions, and decision-making for two parties forming a business partnership.

Create contract for free

What this contract contains

Preamble and parties. Names the partnership and each partner. Choose your side in the creator.

Purpose. States the business the partners will carry on. You write this in the creator.

Contributions and ownership. Records what each partner puts in, the capital accounts, and how ownership, profits, and losses are split.

Management. Lets each partner handle ordinary work and sets a vote for major decisions.

Payouts and transfers. Covers distributions, the yearly books, and the rule that a partner cannot transfer its interest without consent.

Term and withdrawal. Starts on the effective date and lets a partner leave on notice. The business can continue, with a buyout of the withdrawing interest.

Confidentiality. Keeps non-public partnership information limited to running the business.

Governing law. Sets the state law that governs the partnership agreement and where disputes must be brought. Choose the jurisdiction in the creator.

General. Covers assignment limits, waiver rules, severability, entire agreement language, notices, and counterpart or electronic-signature execution language.

Signature blocks. Authorized signatory and title lines for each party, ready for wet-ink or e-signature fields.

PARTNERSHIP AGREEMENT

This Partnership Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date"), by and between:

[Party A], a corporation ("Partner A"), and

[Party B], a corporation ("Partner B").

Each may be referred to as a "Partner" and together as the "Partners." The Partners wish to carry on the business described below as a partnership on the terms of this Agreement.

1. Purpose. The Partners associate as co-owners to carry on [description of the partnership business] (the "Business") for profit. Each Partner is an agent of the partnership for carrying on the Business in the ordinary course. This Agreement does not create an employment relationship between the Partners.

2. Contributions. The Partners will contribute the following to the partnership: [description of each partner's contributions]. A further contribution needs both Partners to agree in writing.

3. Capital Accounts. The partnership will keep a capital account for each Partner. An account starts with that Partner's contributions, goes up by profits allocated to that Partner, and goes down by losses allocated to that Partner and by money or property paid out to that Partner.

4. Ownership and Profits. Ownership of the partnership is [ownership split]. Profits and losses are allocated in that same proportion unless the Partners agree otherwise in writing. Allocations are recorded in the capital accounts.

5. Management. Each Partner may take ordinary actions in the ordinary course of the Business. Major decisions require both Partners to agree. Major decisions include admitting a new partner, selling substantially all of the assets, borrowing outside the ordinary course, and dissolving the partnership. If the Partners cannot agree on a major decision within 30 days after one Partner asks in writing, either Partner may require the partnership to wind up.

6. Payouts. The Partners will pay out available cash when they agree in writing, and not if the payout would leave the partnership unable to pay its debts as they come due. On winding up, creditors are paid first. What remains is paid to the Partners in proportion to their positive capital accounts.

7. Books. The partnership will keep records of its income, expenses, and capital accounts, and will give each Partner a yearly summary within 90 days after the year ends.

8. Transfers. A Partner may not sell, pledge, or give away its interest unless the other Partner agrees in writing. A transfer that breaks this section has no effect.

9. Term and Withdrawal. This Agreement begins on the Effective Date and continues until dissolved by written agreement or as required by law. A Partner may withdraw on 30 days' written notice. Withdrawal does not by itself require the partnership to wind up. The remaining Partner may continue the Business, and the withdrawing Partner is entitled to the amount that would have been distributable if the partnership were wound up as of the withdrawal date, paid within a commercially reasonable period.

10. Confidentiality. Each Partner will keep confidential the partnership's non-public business information and use it only for the Business, except for information that is public, independently developed, or required to be disclosed by law.

11. Governing Law. This Agreement is governed by the laws of Delaware, without regard to conflict of laws principles. Any legal suit, action, or proceeding relating to this Agreement must be instituted in the state or federal courts located in Delaware, and each Party irrevocably submits to the exclusive jurisdiction of those courts.

12. General. This Agreement is the entire agreement about the partnership, may be amended only in a writing signed by both Partners, and may be signed in counterparts, including electronic copies. If a provision is unenforceable, the rest remains in effect.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

Partner A: [Party A]

By: ________________________________

Name: [Signatory]

Title: [Title]

Partner B: [Party B]