What is a Partnership Agreement?
A Partnership Agreememt is an agreement between two or more parties who wish to enter into business together in the form of a partnership.
This agreement covers all of the important aspects of the working relationship, including the contributions of each party, responsibilities, share of profits and winding up. Unless you have agreed otherwise, all partners are equal and must share the business profits and losses equally.
Unlike a company, a partnership is not a separate legal entity, although it must have a tax file number (TFN) and an Australian business number (ABN) and must lodge a tax return. Each partner must pay tax on the proportion of partnership income that they receive in a financial year.
Do I need a contract for a partnership?
Yes, absolutely! A contract protects both parties.
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.
You need a proper written contract to enforce your rights and protect your interests in case something goes wrong.
What does the Partnership Agreement template include?
Our Partnership Agreement template covers everything you need:
★ Partnership details
★ Duration and Termination of the Partnership
★ Labour Contribution
★ Financial Matters (including profit split)
★ Restrictions on the parties
★ Costs and Expenses
★ Winding Up
★ Dispute Resolution
Do I need a Partnership Agreement for a one-off project?
No, a Partnership Agreement is really designed for an ongoing business relationship.
For a one-off project, you should have a 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)