Sample Utah Partnership Agreement
Everything You Need to Know About Creating A Partnership Agreement in Utah
If you are planning to set up a partnership business, the first and the most important thing that you and the rest of the partners need to do is to come up with a partnership agreement. Also called a general/ business partnership agreement or a partnership contract, the partnership agreement refers to the legally binding legal instrument created to govern the operations of the partnership business. The agreement sets out the terms and conditions that the parties to the partnership agree on, as well as the rules that govern the business, and also the relationships created plus the roles and the obligations of the partners. This document has all the possible and important contingencies included.
Some of the important aspects covered by the partnership agreement include:
- The relationships between the partners and between the partnership and the partners
- The general operations of the partnership business and how the business will be run
- The conditions that would call for the amendment of the agreement.
Essentially, your partnership contract would ensure that your business is set on reliable and strong structures, all intended to ensure the success of your business. To get started on the right path, the first thing you could do is to download our free Utah partnership agreement form. This form is a template created by professionals, and it contains all the important sections that you must have in your agreement document. The legal partnership template is based on enforceable and legally acceptable partnership contracts, and your only job would be to curate the contract to ensure that all its sections match the unique needs of your business, as well as any other requirements that the partners may have.
Note, however, that even with the best partnership agreement templates, it is up to you to make that agreement yours. It must have details that are specific to your business and conditions that match your business needs. That said, here are the most important elements of your business partnership contract.
Elements of a partnership agreement in Utah
The introduction may not sound like much, but this section of your partnership contract specifies all the parties in the partnership, and it also introduces the partnership. Some of the details to be included here include:
Partnership’s name – this section is crucial because there are several types of partnerships that define the structure of the partnership. The name is, therefore, important because it allows you to specify the kind of partnership your business is. After the name, you will be required to specify the business’ principal office – this is the office where all the official documents for the business will be delivered.
Purpose and Term of your partnership – once you’ve identified the partnership business, the next thing is to specify what the business is intended to do, the goals it’s expected to attain, and how long the business is expected to be running. While some partnership businesses are expected to last until perpetuity, others are dissolved when the initial goals are met; hence the need for term specification.
To further streamline the operations of your partnership business, you need to make sure that the contract has all the important clauses needed to lay out a solid ground for your partnership.
This section of the agreement is crucial as it’s designed to ensure that partners don’t have disagreements about important aspects of the contract. This section covers things like the partners’ contributions. The contributions to be included in the agreement include cash, property like equipment and building, sweat contributions, and intellectual property, among others. These contributions must be specified in the agreement for reliable referencing in the future, especially if a dispute arises. Also, the method used to determine the ownership percentage of each partner should be outlined – 50/50 (this is hardly ever an option because one partner often takes on more responsibilities), 60/40, 70/30, or any other agreed percentage.
Besides contributions, the other important financial aspect to be discussed is how the profits/ losses will be shared, as well as the capital draws – how much one can withdraw and when the withdrawal can be made.
Which decisions are partners allowed to make by themselves? Which are the limitations to the authority of a partner? At the end of the day, you need to set limits when it comes to what partners can and can’t do to ensure that the right decisions are made. You need to work on avoiding scenarios where a partner assumes too much authority, jeopardizing the partnership by, for example, taking on a huge loan in the name of the partnership.
This clause often features the mediation clause, which lays out the procedures to be followed in the event of a crisis or an internal feud between the partners. This clause would compel the partnership to seek the guidance of a professional arbitrator or mediator to ensure the resolution of whatever conflict, amicably.
So, are you ready to create a partnership agreement for your business? Well, whether you are in Ogden, Salt Lake City, Park City, St. George, Provo, Moab, Logan, or any other city in Utah, you could download our partnership agreement form here to get started today.
UT Partnership Agreement
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