Everything You Need to Know About a Partnership Agreement in Florida
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
Legally, a partnership is formed the moment two or more people/organizations agree to do business together, sharing in the profits and the losses of the business. The partnerships are governed by the state laws. In Florida, the creation of a Partnership Agreement is not mandatory, but it’s recommended. The state laws under Title XXXVI 620.1110 guide the establishment, general operations, as well as the governance of business partnerships.
Importance of a Partnership Contract in Florida
The Partnership Agreement lays out the guidelines to be enforced by the partners to ensure the continuity and the success of the partnership. All matters affecting the partnership from profit/loss sharing and voting rights, to termination and buyout procedures are covered and governed by the clauses in the Agreement.
Ready in Minutes to Edit, Download, E-mail and Print
You don’t need a lawyer to create a Partnership Agreement in Florida. You can create a Business Partnership Agreement in minutes using our free Florida Partnership Agreement form, and you don’t have to get the document notarized for it to be enforceable. All it requires is the signatures of the partners.
Essentials of a Partnership Agreement
Our free Partnership Agreement template contains the important elements detailed below.
Financial Rights and Obligations
This is a critical element of the Business Partnership Agreement outlining the amount of each partner’s contribution, the ownership stake of each partner, and how the partners will share the profits and losses. The Agreement stipulates the profit-sharing structure to the implemented – whether the allocation will be based on capital contributions or if all the partners will have an equal share of the profits.
The Partnership Contract also specifies the roles and limitations that an individual partner can undertake on behalf of the partnership. For example, the Managing Partner may be tasked with the day-to-day operations of the partnership, but there are actions this partner cannot make – and the same applies to the Tax Matters representative.
The provisions of this clause establish the voting rights held by each partner, as well as the decisions and actions that can only pass through a vote, and the items that require a majority or a minority vote.
Partner Involvement and Competition
The Partnership Contract must layout specific regulations regarding the involvement of the partners in the business (in terms of time and activities) and also that they shouldn’t engage in any kind of business venture that competes with the partnership business directly.
The Partnership Contract should include a mediation clause to compel the partners to seek the involvement of a third-party mediator to resolve certain conflicts and disagreements of the partners. This clause also saves the partnership from the lengthy court process.
Withdrawal or Death of Partner
The Partnership Contract also guides and governs the operations of the partnership should a partner withdraw or die, such as property division or the continuity of the partnership and the involvement of the heirs or the beneficiaries of the estate for the deceased.
Dissolution of the Partnership
What will bring the partnership to an end? Is buyout an option, and what are the buyout procedures and terms acceptable? Sometimes a partnership is dissolved after set goals are achieved, projects completed, bankruptcy or a partner’s death. These are the types of issues addressed in a Partnership Agreement.
Use our free Partnership Agreement if you are entering into a partnership in Miami, Tampa, Orlando, Naples, Jacksonville, Tallahassee, Fort Lauderdale, or any other city in Florida.