The Benefits of the Partnership Agreement in Louisiana
A Partnership Agreement is also known as:
Business Partnership Agreement
General Partnership Agreement
Articles of Partnership
Would you trust the success and survival of your business, your professional reputation and your livelihood to a handshake or verbal agreement? Of course not. That is why when entering into a business partnership, it is essential that you create a Partnership Agreement and have all of the partners sign it. A Partnership Agreement is a legally binding contract between two or more parties (organizations or individuals) who’ve agreed to do business together and to share in the profits/losses of the business. The Partnership Contract sets forth the rules that will govern your partnership and guide the partnership forward to ensure its success and survival.
The Partnership Contract lays the groundwork for the structure and workings of the partnership to reduce the risk of misunderstandings, as well as disputes among and between the partners and the partnership, increasing the chances of the business’ success.
Ready in Minutes Using Our Free Partnership Agreement Template
You can easily create your Business Partnership Agreement in Louisiana using our free template. You do not need a lawyer. Simply input your information above and in minutes, you can download, edit, email and print your legal document. A Partnership Agreement does not require a notary or witnesses, only the signatures of the partners to be legally binding.
Key Elements of the 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 Partner who represents the partnership to the IRS.
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.
Specifies Control and Ownership of the Partnership
To ensure that the initial partners maintain a favorable ownership stake of the business, the Partnership Contract should have reasonable restrictions on things like the sale or the transfer of the company’s ownership interests. Without it, partners might end up selling their ownership interests in the business partnership, even to the business’ competitor.
The written Partnership Agreement allows the partners to agree in advance on specific aspects of the partnership, for example, dispute resolution and the need for the disputing partners to be compelled into mediation or other alternative dispute resolution options like arbitration.
Protection of the Partners’ Investment and Business
The partnership contract must address the procedures to be followed if a partner is declared bankrupt or if they die. Without procedures on what is to be done in such circumstances, the business and partners’ investments might be impacted negatively and put at risk. The Agreement should also include non-compete and confidentiality agreements.
Whether you are doing business in Shreveport, New Orleans, Baton Rouge, Alexandria, Lake Charles, Metairie, or any other city in Louisiana, you can use our free Partnership Agreement form above.