Basics of a Partnership Agreement in Hawaii
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
When entering into a business partnership with friends, family, colleagues or none of those, creating a Partnership Agreement to ensure the success and survival of your partnership is one of the most important steps you take. A Partnership Agreement is a legally binding contract that details the rights and responsibilities of the partners and how the business will be run.
Free Hawaii Partnership Agreement Ready in Minutes
We make it quick and easy to create a Partnership Agreement with our free Hawaii Partnership Agreement template. You can edit, download, print and email your legal document in minutes. Our template guides you through the essentials of the Partnership Contract, and you do not need to have the contract notarized for it to be enforceable. All you need is for the partners to sign in. To get started, fill in the information above, or read on to learn more.
What’s Included in the Partnership Contract?
Your Partnership Agreement in Hawaii contains information regarding the business (name, purpose, and duration), the details of the business partners, as well as the profit and loss distribution, among other important sections, including financial rights, partner authority, dispute resolution and dissolution of the partnership.
This section details the financial rights and responsibilities of the partners, including the following:
Individual capital contributions of the partners
Whether all partners are expected to contribute the same amount of cash and capital
If all the partners have equal rights/responsibilities or if their rights are based on the partner’s contributions
Allocation of the profits and losses
The percentage of the profits/capital that partners can draw, how and when
If your partnership is a general partnership, it means that all the partners receive equal authority and control over the day-to-day operations of the business. However, if your partnership is a limited partnership, it means that you may have one partner taking up more roles/responsibilities, such as acting as Managing Partner or as Tax Matters Representative (representing the partnership to the IRS).
This section also covers limitations to what a partner can and cannot do on behalf of the partnership. For example, a partner may not take on debt on behalf of the other partners or the partnership, without the approval of the other partners. Another example of partner limitation would be when the partner lacks the qualifications to take on certain roles or responsibilities. For example, the Tax Matters Representative would be the partner with experience and the necessary skills on taxation matters.
The Partnership Agreement includes a mediation clause for certain disputes that would compel the partners to involve a third-party mediator or arbitrator to review the dispute and help the partners come to a resolution, as an alternative to getting the courts involved.
Partner Withdrawal or Death
This section stipulates the steps and the measures to be taken in the event of a partner’s death, for example, property division or the involvement of beneficiaries, as well the terms and conditions to be met by a withdrawing partner. This section also includes provisions for partnership buyout.
Dissolution of Partnership
The Partnership Contract includes a section on the conditions or events that would necessitate the dissolution of the partnership, such as when a certain objective is met or project completed, bankruptcy or death of a partner.
If you’re doing business in Honolulu, Lahaina, Kailua, Kailua-Kona, Hilo, Kaneohe, Lihue, Waimea or any other city on Hawaii, you can download our free Partnership Agreement form above.