Sample Washington Partnership Agreement
Basics of The Partnership Agreement in Washington
Do you have what it takes to create and run a successful partnership business in the state of Washington? Are you certain that your friends, family, acquaintance, or anyone else you plan to get into business with is on board with your ideas, share in your vision, and they won’t pull the rug under your feet to break things up?
At the end of the day, we are only human, we are flawed, and despite having the best intentions, there are many cases where partners disagree or act in a manner that is generally not agreeable or in line with the vision of the partnership, and when this happens, even the most successful partnerships fail. For this reason, you need to ensure that you set in place the right measures to ensure the success of the partnership. To do that, you need to create a partnership agreement specific to the needs of your business. This agreement has the terms and the conditions for the partnership business, the rules that govern the operations of the business, as well as the roles and the responsibilities of the parties to the relationship. This agreement is specifically called a partnership agreement (also called a partnership contract, business partnership agreement, or a general partnership agreement.
This agreement outlines the rules, roles, relationships, and the responsibilities intended to keep the partnership business going. Basically, the agreement allows you to clarify/ codify the operations of the partnership/ business.
To ensure that everything runs smoothly, we recommend creating an agreement specific to the needs of your business. Using our free Washington partnership agreement form, you get to create a legally enforceable document that will guide your business throughout its lifetime. To help you get started with your partnership agreement in Washington, here are some of the most important sections to include in your partnership contract.
Important Clauses in The Partnership Agreement in Washington
Partnership Name/ Purpose/ Address
The first section of your partnership contract has the details of the business, including your business name that’s descriptive of the partnership structure, the location of the business’s main office’s direction, as well as the primary purpose of the business. This section of the agreement would also include the duration of the partnership and the goals of the partnership.
The agreement also includes the names of all the partners and the parties of the partnership. The addresses of the partners would also be included in this section.
Financial Matters – Capital Contributions and Profit/ Loss Distribution
One of the most important sections of the partnership contract is this section that gives the specifics of the partnership regarding money. Money is one of the biggest and the most important factors when it comes to businesses, and it’s also one of the biggest causes of contention. But you don’t have to fight about money unnecessarily thanks to this partnership contract. How?
In this agreement, you get to specify the capital contributions of the partners, including the cash, property, buildings, intellectual property, and any other kind of partnership. By outlining the capital contributions of all the partners, you won’t have to worry about disagreements over who gets a smaller share of the profits and who doesn’t. Clarification of the capital contributions may also be important for you if you plan to use the partners’ capital contributions to determine the ownership interest/ percentage of each partner.
Besides the capital contributions, the agreement also offers insights into profit (loss) sharing. Whether you choose to be share in the profits equally or based on the capital contributions of the partners, this section makes it possible for you to specify the terms. On top of all that, the agreement also specifies the terms for capital draws, the need/ terms for additional capital draws, voluntary and involuntary withdrawal of capital and partners.
Resolution of partnerships
Even with rules defining the roles and the obligations of the partners, disagreements are still bound to happen. To ensure that the business runs smoothly after a disagreement, you need to ensure that the partnership contract has a dispute resolution clause to guide in resolving disputes and all disagreements. A mediation clause would ensure that a mediator or an arbitrator is sought.
Dissolution of partnership
This section of the agreement outlines the terms of dissolution and the conditions that would necessitate the dissolution of the partnership agreement. Asset sharing and capital sharing procedures should also be outlined here, as well as the steps to take in the event of the death or incapacitation of the partner.
The other important sections you need to include in your agreement include:
- Steps for adding or terminating partners
- Voting rights
- Partner authority
- Management and the division of responsibilities
- Bank accounts set up, accounting, and management of taxes.
If you are interested in creating a partnership agreement for your business in Spokane, Seattle, Vancouver, Tacoma, Bellevue, Olympia, or any other city in Washington, get our partnership agreement form here.
WA Partnership Agreement
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