A business partnership template is a document that is used to draft a legal agreement between two or more business partners. The template spells out the business structure, the responsibilities of partners, the financial contribution, how decisions are made, and what would happen if one partner wanted to sell or leave the company. It also details how the partners split profits.
Here’s a sample Business Partnership Agreement template that can be easily customized and adapted to meet your requirements. It’s free to download and use.
Why is a Business Partnership Template Important?
The primary purpose of a simple partnership agreement template is to spell out the 'rules of engagement' between the company and partners. One way to think of it is that it lays out a path for how partners are to deal with business matters.
Most business partners never think about what would happen in the case of disputes when they establish their partnerships. Fortunately, a business partnership template can make it possible for this process to be easily guided in the future. It provides proof of a legally enforceable agreement between the business partners.
What Should Be Included in a Business Partnership Template
The business partnership template covers a lot of details. This is because business partnership agreements are pretty broad. They cover many aspects, and when drafting them, you must include every foreseeable issue that might arise regarding how the business is run. The following are some of the details that must be included in the business partnership template:
A business partnership template must make it possible for interested parties to spell out who owns what percentage of the business they will be starting together. This way, each partner's stake in the company will be clearly outlined.
A strategic partnership agreement template must include a section for the partners to explain what activities the business will be engaging in. It must also include details about what activities the company will not engage in.
A partnership agreement template word must give a detailed description of how decisions will be made in the business. It should also outline the responsibilities of each partner when it comes to the making of decisions.
Apart from that, the template should also include details about who holds financial control of the business. Partners should also write details about the partners who will be approving the addition of new partners. Other details that have to be presented include the sharing of profits.
Depending on how the business partnership is set up, the template should also contain details about the liability of each partner. To make sure this is set up correctly, the business partnership document must be combined with other documents like the articles of incorporation. This is because a business partnership agreement on its own will likely not be enough to protect all partners from liability.
A business partnership template needs to include how disputes will be resolved. This should be done regardless of what type of relationship the partners have. Even when the partners are related, or they are friends, disagreements can still take place. Therefore, it would be best to have structures detailing how these disputes are to be handled.
How a Business Partnership Template Levels the Playing Field
A properly drafted business partnership template clearly outlines each partner's expectations. It also makes clear the duties and responsibilities of every partner in the business.
It is also important to note that things are ever-changing in business. Therefore, it is vital to use a business partnership template to serve as a baseline document in times of uncertainty. This template will also help guide business growth and govern the addition of new members to the partnership.
How to Use a Business Partnership Agreement Template
If you plan to get into business with a partner, this free partnership agreement template will serve as a starting point and an eye-opener. It will show you some of the things you might otherwise overlook when starting a partnership.
Even if some of the items in the business partnership agreement template may seem unnecessary when you are starting, you will be glad you put those things into consideration one day. Please note that the template only serves as a guideline and you are free to add more details or remove any that don’t apply in your particular situation.