Sample Wyoming Partnership Agreement
Elements of the Partnership Agreement in Wyoming
Before you get into a business venture, you need to ask important security questions. One of these questions is ‘how big is the risk?’ is driven by the need for security of the investment you are about to make, and for other people, ‘Is there a fallback plan?’ also a security precaution. These and many other questions are often posed to ensure that investments have safety nets of sorts. Although some businesses go burst too soon, and the investors/ owners lose everything in the process, it’s a good thing to be a little more optimistic and to ensure even the smallest level of protection. For partnerships, one of the safety nets is in the form of a partnership agreement.
In Wyoming, the partnership agreement may not be a standard partnership business registration document, but it is one of the most recommended documentation for partnerships. The reason for this recommendation is that a partnership may easily go underwater if it lacks important documents. The agreement prevents that from happening or minimizes damage by laying out the ground rules that govern all the areas of the business. The document is legally binding and enforceable once it’s signed by the parties to the partnership, and the best part is that your partnership agreement in Wyoming would be enforceable without notarization.
All you need to do is to make sure that the agreement bears all the important clauses/ elements that would ensure business success. These include rules, responsibilities, and relationships that guide and govern the parties to the partnership. As a rulebook, the partnership agreement trumps a handshake agreement, and you won’t have to worry about partners going back on their word.
To get all the benefits of this agreement, the first thing you should do is to download our free Wyoming partnership agreement from online. This form comes with all the important sections needed in the creation of a rulebook for your partnership business, and the best part is that it is free. The partnership agreement form acts as a template that your agreement would be set on. Being editable, you get to tweak the different sections until all the partners agree to the new terms and conditions instituted into the document. Note that the agreement is also called a partnership contract, business, or a general partnership agreement.
Essential Elements of the Partnership Agreement
Authority (Partners’ and Partnerships)
One of the fundamental things to be covered in the agreement is the definition of the authority of all the partners. Here, you all need to agree on the authority extended to each partner and whether a partner has the authority to bind the partners and the partnership or not. The legal and financial obligations of the partners, as well as the authority of the partners, should be specified in the agreement to prevent a situation where the partners step on each other’s toes. On the same breadth, the agreement also needs to include limitations to the authority of the partners, while also outlining the consequences that would arise from a partner overstepping on the authority given. For example, a partner cannot lease a property on behalf of the partnership and the other parties, without the consent of the other partners.
Don’t forget about the authority, roles, and responsibilities of the managing partner and the other named partners.
Next, you need your partnership agreement to outline the details regarding the contribution and the handling of finances. For starters, the most important details to be incorporated in the agreement include the time/ date for the partners to make their initial capital contributions, as well as the time needed for the partners to provide additional capital. The amount of each partners’ contribution should also be specified in the agreement. In addition to the timing and the amount of each partner’s capital contributions, it’s also important to put in place terms for loan applications and other forms of capital contributions, as well as the valuation of the non-monetary capital contributions such as sweat contributions and intellectual property.
Besides capital contributions, the other financial matter to be covered in the partnership contract has to do with the distribution of profits and losses among the partners, as well as the timing and the amounts acceptable for draws. Steps for loss recovery should also be instituted.
In most partnerships, it’s recommended to incorporate a mediation clause into the partnership contract. This clause would offer direction to the business when a dispute arises, either among the partners or between the partners and the partnership.
Not be preemptive, but incorporating exit procedures is the smartest move you could make to protect your business interests. Here, the events that would spark the exit will be specified, as well as the procedures that will be followed when the said event takes place. Buyout and partner termination procedures (terms and conditions will also be included).
To get started with your partnership agreement in Jackson, Cheyenne, Casper, Laramie, Gillette, Sheridan, Cody, or any other city in Wyoming, download our free partnership agreement form today.
WY Partnership Agreement
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