Partnership Agreement in Iowa
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
Understanding Partnership Agreements
In Iowa, a Partnership Agreement refers to the legally binding written agreement that governs the operations of a business partnership, as well as the conduct of the partners, their roles, rights, relationships, and responsibilities (to each other and the business). The primary role of the Partnership Agreement is to provide the framework for the structuring of your partnership and how the partnership business will operate. Whether you are planning to go into business with your sibling, spouse, or acquaintance, creating a Partnership Contract is the first step to getting your business venture on the right track for success.
How to Create a Partnership Agreement
You don’t need to consult an attorney to create a General Partnership Agreement. We’ll help you fast-track the process with our free Iowa Partnership Agreement template. Our form is easy to use and guides you through the entire process to create your legal Agreement. Simply enter your information above and within minutes, you will have a Partnership Agreement that you can edit, download, print and email, and you do not need to have the Agreement notarized for it to be valid and enforceable. All you need are the signatures of the partners.
Elements of a Partnership Contract
The Partnership Agreement begins with the basics of naming the partnership and specifying where you will do business and for what purpose, along with the names and contact information for the partners. The partnership may be open-ended, or you can choose a specific end date or upon completion of a specific objective or project.
Partner Contributions and Stake
This section of the Agreement stipulates the contributions of the partners in the form of cash and capital, as well as how much of a partner’s time and specific activities each will contribute to the business. The Agreement will also specify the ownership stake each partner is entitled to, given their contributions, and the distribution and the allocation of profits, losses or draws. While most partnerships distribute profits and losses based on individual partner capital contributions, there are other ways to structure as long as all partners are in agreement.
In this clause, the management of the partnership is outlined, with the designated Managing Partner and his/her role is outlined. Often, the designation of the Managing Partner is based on experience, but the managing partner may also be determined through voting – majority or unanimous vote. Besides the Managing Partner, the Tax Matters partner is also named in this section, and his/her role and responsibilities outlined.
This clause also stipulates the authority of the members to ensure that other partners are protected from liability should a partner act in a manner that could bind the partnership. For example, partners with authority to enter into binding contracts with other individuals or companies, on behalf of the partnerships are named. Limitations to the authority given are also clarified, as well as the conditions to be met before getting into such contracts.
Voting and Decision Making
This section stipulates the voting rights of each partner, as well as the decisions that require a vote to pass. Voting and voting powers could be determined proportional to profit shares, contributions, or each partner could have an equal vote.
One of the most important functions of a Partnership Agreement is to outline in advance how potentially contentious issues and disputes among the partners will be resolved, as opposed to having to litigate through the courts, which can be a long and expensive process that could potentially collapse your partnership/business. It is standard to include a Mediation Clause that compels the use of a third-party mediator to review and resolve certain disputes among partners.
Withdrawal/Addition of Partners
The contract should also state the procedures that should be initiated when a partner dies or withdraws their partnership, and If new partners are to be admitted in the future, the terms and procedures for new partners must be specified.
If you’d like to create a business Partnership Agreement in Davenport, Des Moines, Ames, Cedar Rapids, Iowa City, Dubuque, Sioux City, or any other city in Iowa, you can use our free Partnership Agreement form above to get started.