Everything You Need to Know About the Partnership Agreement in Illinois
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
A Partnership Agreement is a legal contract between partners in a business venture which lays out the rules and regulations that will govern the partnership and clarifies the roles, relationships, and the responsibilities of the partners (to each other and to the partnership business).
How to Create a Partnership Agreement
The good news is that you don’t have to hire a lawyer to help you through the particulars of the Partnership Agreement, thanks to our free Illinois Partnership Agreement form. This form is structured in a simple format that you can download, edit, print and e-mail. You don’t have to get the document notarized for it to be enforceable. All it requires is the signatures of the partners to be legally binding and enforceable.
Not All Partnerships Are Created Equal
You might expect that all partners in a business partnership contribute equally to the business in terms of time/activity and capital, or that all partners share equally in the profits and losses of the business, but that is not always the case. For example, a partner who contributes more in terms of capital may or may not be given a greater share of the profits of the business. What about when one partner takes on managerial responsibilities for the day-to-day operation of the business? How is their contribution compensated? And what about decision-making and authority to act on behalf of the partnership? Which decisions require voting by the partners, and which do not? These are all issues addressed in the Partnership Agreement.
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.
The Beginning of the End?
When entering into a business partnership, it is important that the partners fully understand what they are getting into—and how they can get out of it. It’s not as simple as tearing up the contract. Some partnerships have specific start and end dates. Others may be open ended or bound to the completion of a certain objective or project. A Partnership Agreement will specify the circumstances and processes for ending the partnership, as well as how a partner can withdraw and whether new partners can be added.
Whether you are doing business in Chicago, Champaign, Peoria, Rockford, Joliet, Naperville, Schaumburg, or any other city in Illinois, you can create your Business Partnership Agreement today using our free Partnership Agreement form above.