Partnership Agreement

$99.00 inc. GST

  • Make your partnership official
  • Peace of mind that your business is legally protected
  • Suitable for all Australian states and territories
  • Drafted in plain English by Australian lawyers
  • Complete our Partnership Agreement template in under 5 minutes
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What is a Partnership Agreement?

A Partnership Agreement is a legal agreement between two or more parties who wish to conduct a business together in a partnership.

A Partnership Agreement governs all of the important terms of the working relationship – don’t form a partnership without one!

Some of the most important terms of the agreement include each party’s contributions, decision-making, share of profits, and winding up.

Unless you have agreed otherwise, all partners are equal and must share the business profits and losses equally.

 

Who can use this template?

  • Partnerships
  • People wanting to formalise their business relationship
  • Two or more parties working together
  • Suitable for all Australian states and territories

 

What is a Partnership business structure?

A partnership is a group of people who conduct a business together and distribute income or losses between themselves. For example, if you and a friend or family member decide to set up a business together, you might operate it as a partnership.

Partnerships are relatively easy and inexpensive to set up and operate. The partners share income, losses and control of the business.

Key features of a partnership:

🔹 require a separate tax file number (TFN)

🔹 must apply for an Australian business number (ABN) and use it for all business dealings

🔹 share control and management of the business

🔹 don’t pay income tax on the income earned – each partner is taxed separately on their share of the partnership income

🔹 require a partnership tax return to be lodged with the Australian Taxation Office (ATO) each year

🔹 require each partner to be responsible for their own superannuation arrangements

🔹 must register for GST if turnover is $75,000 or more

 

Do I need a written contract for a partnership?

Yes, it’s highly recommended! A Partnership Agreement protects everyone involved.

A Partnership Agreement will help to set the ground rules in black and white, so everyone is clear on their obligations and responsibilities from the start. Having a formal written agreement will also reduce the likelihood of disputes.

A Partnership Agreement is about more than wrapping your partners up in red tape and telling them what they can’t do. Think of your contract as relationship insurance: it does all the hard, boring work of keeping the relationship on track so that you can focus on the fun part – the actual business.

 

What does the Partnership Agreement template include?

Our Partnership Agreement template covers everything you need:

  • Partnership details – including details for each partner and the partnership name
  • Duration and Termination of the Partnership – start date and notice period required before dissolving the partnership
  • Labour Contribution – how much labour each partner will contribute (e.g. full-time, part-time)
  • Decision Making – how the partners can make decisions (e.g. unanimous vote)
  • Financial Matters – includes capital contribution, drawings, profit split, wages and bookkeeping
  • Insurance – requirements for insurance
  • Restrictions on the parties – conditions around entering contracts, borrowing money and incurring debts for the partnership
  • Costs and Expenses – how the partners will split expenses
  • Winding Up – conditions for winding up the partnership (e.g. if one partner wants to leave)
  • Dispute Resolution – this clause explains the process to deal with a dispute
  • General – standard contract clauses such as Assignment, Severance, Entire Agreement, Waiver and Governing Law

 

Do I need a Partnership Agreement for a one-off project?

No, a Partnership Agreement is really designed for an ongoing business relationship where two or more people formalise the terms of their partnership business structure into an agreement.

For a one-off project, you should look at a Collaboration Agreement instead.

 

Does the partnership name have to be our real names?

No, you can choose a different partnership name if you like.

You may choose to register a business name to use as your trading name.

Otherwise, you can use a combination of the partners’ names (e.g. John Smith & Jane Smith)

 

Is this Partnership Agreement template legally binding?

Absolutely!

All of our templates are written by qualified Australian lawyers who hold an Australian legal practicing certificate.

We are affiliated with a commercial law firm based in Sydney.

More Details

How long is a Partnership Agreement effective?

Partnership Agreements can either be indefinitely effective or include a specified termination date. Either side of the partnership can look to have the agreement dissolved, providing they abide by the outlined notice period.

A partnership can also come to an end in circumstances such as when a partner is legally unable to remain a partner; this can be the case through death or court order.

Can we negotiate on the key terms of the Partnership Agreement?

You bet!

Before you kick off your partnership, you should discuss what each party is bringing to the table – including financial contributions, equipment and resources – and how you will manage the partnership once it’s established. You can use our Partnership Agreement template to guide you on some of the things you can discuss before you get started.

What can I do if things don’t work out?

We have included a winding-up clause in the contract, which stipulates the conditions for winding up the partnership, such as if one partner wants to leave.

Generally, when a partner no longer wants to be involved with the partnership, they must provide formal written notice to the other partner(s) of their intention to dissolve the partnership.

If notice of partnership dissolution is given, the partners need to arrange for a valuation of the partnership assets and agree to a split of partnership assets’ total value.

What are some common issues with partnerships?

Here are some issues that often come up in partnerships:

  1. Someone who isn’t pulling their weight in the partnership is demanding an equal share of the profit
  2. One of the partners wants to use their work in another project
  3. Another partner doesn’t want anything to do with you anymore and wants their work taken out
  4. A third party sues you over something that one of the partners contributed to the partnership

A Partnership Agreement will help you to avoid these issues.

How much will each partner get paid?

You should negotiate before you start to work out how and when you will be paid and what the profit split will be, You could split everything 50/50, or you could choose a different percentage split.

Factors that could influence remuneration include the resources each party contributes (i.e. how much they put in!), how much time they spend on the partnership or how much they sell (if you are working on a commission structure).

FAQ

All of our templates come in Word format (docx). We recommend that you use Microsoft Word on a desktop to fill in the template.

Yes, all of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.

Yes, the template is suitable for all Australian states and territories.

What do I have to do after I download the template?

The template includes instructions on how to use it, as well as helpful comments along the way to guide you. Don’t just take our word for it, read what other customers have said about our products here.

Estimated time to complete the template in Microsoft Word is around 5-10 minutes. We have designed our templates to be very user-friendly.

How often are the templates updated?

We frequently update our template library and provide minor updates to wording and formatting in our documents.

If the law changes, we’ll email you with the changes and updates to add to your existing templates. You have lifetime access, so any updates are provided free of charge.

Refunds

We offer a 14 day moneyback guarantee on all purchases.

We want to make sure you are 100% happy!

We have worked hard to provide quality legal documents for Australian small businesses.

We’re confident you will LOVE our products – but we offer this extra guarantee so you don’t have to worry.

Our no-hassle, 14-day refund policy means that if you are not satisfied, for any reason, we’ll work with you to make sure you’re happy, even if that means a full refund.

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BS
11 November 2020
Brad S.
AU AU
I recommend this product
Partnership agreement

excellent document. Easy to download. I will be using these guys again for other legal docs I need.