Business Partnership Agreement in Indiana
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
A Partnership Agreement refers to a legally binding contract between two or more individuals/organizations who agree to go into business together and to share in the profits and losses. This contract sets out essential terms and conditions governing the relationships between and among the partners, and how the business will operate.
Even with business partnerships between siblings, spouses, or friends, disagreements are bound to arise. Without a written contract laying out the rules of engagement, the business could suffer or fall apart. That’s why creating a Partnership Agreement is one of the most important steps you can take for the success and survival of your business partnership.
How to Create a Partnership Agreement
The good news is that you don’t have to hire a lawyer to create a Partnership Agreement, thanks to our free Indiana Partnership Agreement form. This form is structured in a simple format that you can download, edit, print and e-mail, and you don’t have to get the document notarized for it to be enforceable. All it requires is the signatures of the partners.
Some of the clauses in a Partnership Agreement in Indiana are explained below.
Review of the Partnership Terms
In addition to naming the business partners and listing the partnership’s date of formation, this section also reviews and lists the different activities of the partnership, the duration/term of the partnership, as well as the purpose of the partnership.
Allocation of Profits and Losses
This section outlines the allocation of profits and losses between the partners, whether the profits and losses of the partnership will be shared equally or based on the cash and the capital contributions of each partner.
Management and Authority
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.
This clause stipulates the conditions for voting, whether different things will be approved via unanimous or majority voting. Voting and voting powers could be determined proportional to profit shares, contributions, or each partner could have an equal vote.
In the absence of a partnership contract, the contentious matters of the partnership might end up in court, which can be a lengthy 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.
What conditions should a partner meet before withdrawing from the partnership? How is the partner’s share handled? Can a partner’s stake be bought by the remaining partners? Would a Managing Partner’s withdrawal of partnership necessitate the dissolution of the partnership? These are the types of issues addressed in a Partnership Agreement.
To create a business partnership in Evansville, Indianapolis, Fort Wayne, South Bend, Bloomington, Carmel, Kokomo, Fishers, Valparaiso, Gary, or any other city in Indiana, you can use our free Partnership Agreement form above.