Partnership Agreements – Don’t Leave it at a Handshake
A partnership is a relationship that exists between persons (or even corporate entities and trusts) who are “carrying on a business in common with a view of profit” (Partnership Act 1892 (NSW), section 1).
Author: Clarissa Sempel
26 October 2021
When you are looking to go into a new venture or opportunity with someone else, you may consider different structures for that venture, including a partnership.
Without a written agreement, you may create problems for you down the line.
These problems may arise through disputes on disagreements on what was agreed at the beginning, differences of opinions. Such disputes will result in costs to you (legal costs, time, and stress).
Instead of leaving an agreement to start a partnership at a “handshake”, it is best practice for you to have a written agreement in place to provide structure to your relationship and your business needs.
A partnership agreement is a document that can provide this.
Areas which would be addressed in a partnership agreement include:
- The goals / purpose of the partnership;
- Obligations and responsibilities;
- When and how meetings are to take place;
- A process for decision-making;
- Sale of partnership assets;
- Succession planning in the partnership and pre-emptive rights;
- How the partnership may be terminated or ended;
- How any disputes would be resolved that incorporates a set time frame, guidelines, and a dispute resolution process.
There are a number of risks in preparing these documents correctly and a higher risk in not having a written agreement in place at all.
The experienced team at Access Law Group can help navigate the beginning of your partnership and assist with providing advice on the structure and drafting up a partnership agreement (or other documents) that will meet the needs of you and the venture you are just about to begin.
Contact the team at ALG on 02 4220 7200 or by email at lawyers@alg.com.au for a free initial 30-minute consultation.
