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Small Business Partnership Agreement Template

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Prepared by:

​[PartnerA.FirstName][PartnerA.LastName][PartnerA.Company]​

Prepared for:

​[PartnerB.FirstName][PartnerB.LastName] ​[PartnerB.Company] ​

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This small business partnership agreement, entered into on [Document.CreatedDate] is by and between the following entities:

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​[PartnerA.Company] ​[PartnerA.StreetAddress][PartnerA.City][PartnerA.State][PartnerA.PostalCode] ​[PartnerA.Phone]​

​[PartnerB.Company] ​[PartnerB.StreetAddress][PartnerB.City][PartnerB.State][PartnerB.PostalCode] ​[PartnerB.Phone]​

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Definition

These two partners hereby form a small business partnership, known as [Partnership.Company] or simply “The Partnership.” The principal location of the Partnership shall be as follows: [Partnership.StreetAddress][Partnership.City][Partnership.State][Partnership.PostalCode][Partnership.Phone]​

Duration

The Partnership shall commence as of the date of this small business partnership agreement, and shall continue until cancelled pursuant to the full terms of this agreement.

Capital Contribution

Each of the listed partners shall contribute capital to the Partnership as listed below. These capital accounts shall be maintained separately, and shall be regularly balanced in accordance with each partner’s share of the Partnership’s profit and loss.

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Distribution of Profits and Losses

All net profits from the Partnership shall be equally shared amongst the partners. In addition, any net losses shall be jointly shared by the partners in a fair and equitable manner.

Partnership Accounts

Neither of the partners may charge the Partnership’s accounts for time or services rendered to the Partnership. They may, at their discretion, withdraw their share of net profits from their respective credit accounts from time to time.

Interest

The Partners’ capital contributions shall not bear interest.

Responsibilities of Partners

The Partners shall equally share responsibility for managing the Partnership. As such, the Partners agree not to enter into additional partnerships, borrow or lend money, or enter into any contract or business position without consent from one another.

Allocation of Funds

All funds belonging to the Partnership shall be deposited and held at [Partnership.Bank] in an account under the Partnership’s name.

Financial Records

The Partnership’s financial records shall be fully documented and maintained at the Partnership’s principal location. These records shall be maintained on a fiscal year basis, with the Partnership’s fiscal year beginning as of the month of this small business partnership agreement. A thorough audit of the Partnership’s financial records shall be conducted by a third party once per fiscal year.

Termination

The Partnership may be terminated at either time by either partner. In the event that one or both Partners wish to cancel this small business partnership agreement, all of the Partnership’s assets shall be promptly liquidated. After resolving any debts, each partner shall receive their share of the Partnership’s final net profits in accordance with their respective shares in the Partnership.

Partner Deaths

The death of either Partner shall grant the surviving partner the right to purchase the other Partner’s interest in the Partnership or dissolve the Partnership entirely at their discretion.

Disagreements Amongst Partners

Any disagreements or claims related to the Partnership or this small business partnership agreement shall be resolved via neutral arbitration in [Partnership.Country] county, [Partnership.State].

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Confidential Information

Both parties agree that all information exchanged during the course of the contract will be treated as confidential. The partners assert and affirm to each other that each partner will take credible measures and all reasonable effort to ensure that such information remains withheld from the general public. Confidential information does not include information that has been revealed to the public by the consent of both partners. Any information about the work processes, patents, workflows, and industry secrets, will be treated as confidential.

No Modification Unless in Writing

If any partner wishes to modify or terminate any part of the contract, or make any changes to any existing business operations, they must let the other partner know in writing. The modification/termination will not be considered valid unless it has the agreement of both partners. (Or, in case of more than two partners, a majority vote).

Reasonable Effort

All partners agree that they will, to the best of their ability, make a reasonable effort to ensure that they consistently create work they are proud of. This is not only limited to the work they produce for [Partnership.Company], but also a code of conduct to be followed in the way they present themselves in front of the public, business partners, and employees.

Non-Compete

All partners agree that for the duration of this contract, or until the time they are no longer associated with [Partnership.Company], they will not engage in any events (unless for advertising purposes), or be a part of any company that operates in the same niche as [Partnership.Company]. It is expressly forbidden for either partner to share trade secrets with competing firms.

Dissolution

Dissolution of the Partnership may occur once all partners or a majority of partners agree to dissolve the Partnership, or at the end of the stipulated term of this Partnership, should an end date be part of this agreement. Any assets and liabilities arising from the dissolution will be shared equally between both partners.

Enforceability

If any part of this agreement is considered null and void (for any and all reasons), the rest of the agreement will still be considered enforceable.

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Disputes

In case of any disputes between parties, all parties agree to peacefully and amicably reach a settlement. If no settlement is reached, or if a settlement amount isn’t agreed upon by both parties, one party or both parties may seek legal recourse in a court of law in [Partnership.County], [Partnership.State].

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Professional Relationships

All parties agree to enter into the agreement by adhering to a strictly professional relationship. If any parties are found to have workplace relationships that have not been communicated to and recognized by the HR department, then they may be asked to terminate their partnership, or be faced with a penalty.

Distribution of Assets and Liabilities

All partners agree that all losses or liabilities, just like assets and profits, will be divided equally amongst all partners. All business partners will routinely undertake a plan of action on how to mitigate liabilities, losses, and overall risk.

Terms and Conditions

All partners agree to accept all terms and conditions mentioned in this agreement, and give their consent to move forward, without needing any modifications in the agreement.

Acceptance

By signing below, the listed individuals certify that they have full authority to represent the partners to this agreement, and hereby enter into this small business partnership agreement.

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MM / DD / YYYY
Signature

​[PartnerA.Company] ​[PartnerA.FirstName][PartnerA.LastName]​

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MM / DD / YYYY
Signature

​[PartnerB.Company] ​[PartnerB.FirstName][PartnerB.LastName]

Small Business Partnership Agreement Template

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This small business partnership agreement template can be used by two companies who wish to form a joint venture with one another.

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FAQ

  • A partnership agreement is a contract that determines the contributions, rights, and responsibilities of each engaged party. It is necessary to ensure all the details before drafting the agreement to avoid any non-precise moments and definitely comply with the local, state, federal laws. In the majority of cases, it is a long-term agreement to verify important terms of the business performance, including new parties’ entering.

  • You may use a small business partnership agreement template whenever you decide to enter into a new business venture with another party. Specifically, the cases are as follows: 

    1. Determine the structure of management. This refers to spelling out the clear responsibilities by which each party is authorized.

    2. Each partner’s share of the business. Describe how much each partner owns. This may depend on the factor of financial investment, or physical investment. The share of each partner can be given as a percentage. This section is supplemented by the responsibilities of each party involved. 

    3. Protection of intellectual property. This is an important nuance that will help prevent many problems. You will protect your intellectual property, which can include trademarks, slogans, patents, etc.

    4. Resolve disputes. In the process of doing business together, misunderstandings may arise, which are easier to solve through a pre-written contract, which includes information about this. 

    5. Termination of the partnership agreement. Such a section may be drafted on a case-by-case basis. It usually consists of the terms of the termination agreement, the division of assets, the transfer of obligations and many other important details. 

    Decision making agreement. Any business requires decisiveness and sometimes crucial decisions. How they will be made can be agreed in advance, so that at some important stage there will be no misunderstandings, and negotiations will go as quickly as possible.

  • A business partnership agreement begins by defining who all parties are and their relationship to one another. From there, it details the terms and conditions of the partnership, such as profit, loss, assets, and responsibility sharing. Lastly, it ends with an acceptance form that all parties have to sign for it to be legally valid.

  • The most important part of a small business partnership agreement is the terms and conditions. It spells out all the information about the name of the company that was created through the partnership; and the date of the partnership. It can also state the amount of capital that each party contributes; the distribution of net income between the parties; responsibilities regarding management and non-compliance; financial statements; the termination of the partnership and many other details that the partners deem important. These details are prescribed in the PandaDoc template, which you can download for free.

Small Business Partnership Agreement PandaDoc

This small business partnership agreement template can be used by two companies who wish to form a joint venture with one another.

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