Free Alabama Partnership Agreement

General Partnership Agreement in Alabama

A Partnership Agreement is also known as:

    • General Partnership Agreement

    • Business Partnership Agreement

    • Partnership Contract

A partnership is a business arrangement between two or more people or organizations, who share ownership in a company and agree to share the profits and losses of the company. A Partnership Agreement is a legally binding written document that details the terms of a business partnership and details the framework for the day-to-day running of the business.

A Business Partnership Agreement clarifies the rights, responsibilities and relationship of the parties, and how any future disputes will be addressed, because verbal and handshake agreements are not reliable or enforceable. Whether the business is a partnership between members of a family or friends, or neither of these, a Partnership Agreement, though not required by law, is standard and highly recommended.

You are already in the right place to get started. Our Partnership Agreement template is free. Answer a few simple questions above, and you are on your way to create a Partnership Agreement. You can edit and email your Business Partnership Contract, as well as download and print. No witnesses or notarization are required when signing a General Partnership Agreement.

What Information is Included in a Partnership Agreement?

While there are different types of business partnerships, and pros and cons for each—including limited partnerships and limited liability partnerships, the information provided here is for a General Partnership Agreement.

A General Partnership Agreement typically includes the following:

    • Who are the partners?

    • What is the name and purpose of the partnership?

    • When does the partnership begin and end?

    • Where are you doing business?

    • What did each partner contribute?

    • How are profits and losses distributed?

Financial Rights

It is often assumed that the partners have equal financial rights and responsibilities in a partnership. However, this isn’t always the case. The Partnership Agreement will specify financial details, such as the following:

    • Whether partners will be required to give capital or loans to start or run the business in case of cashflow issues

    • When and how profits are distributed to partners

    • How losses will be covered

    • Standardization and customization of financial documents

Partner Involvement in Business and Competition

The Partnership Agreement also governs and directs the time or the amount of attention that the partners must put into the activities of the business and outlines the limitations to the ability of a partner to engage in a separate business venture that directly competes with the partnership business.

What is a Managing Partner?

The Partnership Agreement should name a Managing Partner. A Managing Partner is the designated person in a partnership who will manage and control the day-to-day running of the business, including keeping business records and preparing business reports. The Managing Partner serves as both owner and executive of the business.

What is a Tax Matters Partner?

A Tax Matters Partner, also be known as a Partnership Representative for Tax Matters, is the designated person in a partnership who receives tax notifications from the Internal Revenue Service, has the authority to enter into tax agreements on the behalf of the partnership, and is responsible for keeping all partners informed of any applicable tax issues.

Partner Termination/Withdrawal, Death, and Buyout

The Partnership Agreement also covers the terms of how the affairs of the business will be handled if one partner terminates their partnership, when this can happen, and their obligations during the termination process, including:

    • Whether or not the remaining partner(s) have rights or obligations to buy out the departing partner, and if yes, how the buyout price is determined

    • Assigning of partnership interests to third parties, and whether the consent of the remaining partner(s) is necessary or not

    • Consent to new partners in the future and the terms of acceptance

    • Steps to be taken by the remaining partner(s) in the event of the death of a partner

Voting

The voting terms in a Partnership Agreement cover things like the required minimum vote tally, as well as the situations that call for voting and the ones that don’t.

Dispute Resolution

The Partnership Agreement should outline the steps to be taken for dispute resolution. The Agreement may have mediation clauses to compel the partners to seek professional conflict resolution services from a third party who will review the cause of the dispute and then come to a decision on the course of action to be taken.

Our website will help you create a Partnership Agreement. We offer free on-line samples and templates of legal forms, including Partnership Agreements, that make the process that much faster. Simply fill in the form above to create your own Partnership Agreement.

If you want to set up a general partnership in Mobile, Auburn, Huntsville, Birmingham, Montgomery, Tuscaloosa, Hoover, Dothan or any other city of Alabama, you can use our legal forms easily.