Sample Wisconsin Partnership Agreement
How to Create a Partnership Agreement in Wisconsin
A partnership agreement refers to a legally binding document that details the terms/ conditions, and generally, the rules that will guide and ensure a working business relationship between two or more partners/ parties. This agreement features an outline of the roles and the responsibilities of the parties to the partnership business, while also clarifying the relationships among the involved parties and also between the partners and the partnership. Essentially, this document is designed with all the information needed to ensure the smooth running of the business. What this means is that when you are creating an agreement for your partnership business, you must ensure that the information and the conditions outlined cover all the important bases.
In the state of Wisconsin, the partnership agreement is not a mandatory partnership registration document, as is the case in most other states. However, it is highly recommended that you create this agreement because there are many gray areas and assumptions when it comes to business partnerships, and all these issues would be easily avoided with the partnership agreement in Wisconsin.
As a legal document that’s designed to guide in most of the crucial business decisions for the partnership, you need to ensure that it has all the important sections necessary to ensure that any contravention of the conditions will be resolved with ease. Generally, you have the option of working with a lawyer to create the agreement, but there is also the option of using a partnership agreement template. This template comes in the form of a free Wisconsin partnership agreement, and it’s been designed to make the preparation of the partnership contracts as painless as possible. To this end, the legal partnership agreement sample comes with specific sections that need tweaking to ensure that the terms incorporated match the needs of the business.
But the template is not enough, which is why we also offer guidance about the most important sections that you need to incorporate in your partnership agreement in Wisconsin. These sections/ clauses include:
Your partnership contract must have all the important information about business finances. Since finances are crucial for the operational success of any partnership, no financial detail should be overlooked. What this means is that your business contract drawn between the partners must include the timing and the exact value/ amount of every partner’s capital contributions. To ensure that you start things off on the right foot, you should consider specifying the amount expected from each partner, as well as the date that all the partners are required to make their contributions. Also, there should be an accurate documentation of the type of capital contributed and expected to be contributed, whether in the form of capital (cash/ property/ equipment), or a business loan.
In addition to the initial capital contributions, the agreement should also include a provision with a summary of additional capital contributions and how the extra capital would affect ownership stake and the profit share of the partners. Obviously, an agreement over the preferred method for profits/ losses distribution should be included in the agreement.
Besides specifying the meaning of the ‘partner’ and the ‘partnership,’ the agreement should specify the legal implications of these parties, as well as the responsibilities of the involved parties. For example, when it comes to the partner authority, there needs to be a specific guideline regarding the legal authority of this partner, what they may do, and the limit to the authority of the partner. What this means is that in as much as a managing partner is obligated to oversee the day to day operations of the business, there are decisions that would require the input of the other partners for them to pass. It’s important to note that the absence of such limitations often results in a partner overstepping, and if they make a move that affects the other partners, their actions may create rifts that destroy the partnership business permanently.
Involvement of the partners and non-competes
The other important provision in the partnership agreement relates to the amount of time that each partner puts into the business, as well as the activities assigned. Even with a managing partner, there are other roles that require the involvement of the other partners, but in most cases, the managing partner would should more roles and entitled to a salary. With one partner taking on more than the others, the partners that don’t engage in the business actively may be tempted to start competing businesses, which would ultimately bring down the partnership business. To prevent this from happening, all the partners would have to sign non-compete agreements.
The conditions that would necessitate the termination of the partnership, its dissolution, or buyout should also be provided for in the partnership contract. The procedures for termination should also be covered, along with the asset-sharing steps, where necessary.
It’s recommended to incorporate a mediation clause in the agreement as a move to compel the partners to engage a mediator or an arbitrator to ensure the efficient resolution of disputes.
Whether you are in Green Bay, Appleton, Madison, Milwaukee, Eau Claire, La Crosse, Wisconsin Dells, or any other city in Wisconsin, you could download our free partnership agreement form here today to get started.
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