The primary benefit of a Partnership Agreement is that you and your Partner will have a legal document that clearly sets out each person’s rights and responsibilities, which can then be referred to should any such disputes arise.
Many of us know people who have gone into business with a friend, or a family member, because they have known each other for many years, and they never anticipate that any problems could occur. Unfortunately, the High Courts have seen many cases where problems have arisen. To avoid this happening, and for a relatively low cost, Partnership Agreements can be completed very quickly at the outset of any business venture to prevent such situations.
Typical matters you should consider when entering into a Partnership Agreement are:
- an exact description of the business
- who the partners are and their specific duties?
- does the partnership have a specific lifetime?
- details regarding any monies/capital provided by each of the partners
- division of profits
- how are profits and losses are dealt with?
- drawings from the company financial accounts
- retirement and exit mechanisms
- meetings dates
- who has the casting vote when there is a critical decision to be made?
- health, or pension provision should the partner retire through ill health, or voluntarily
- accounting responsibilities
- provision to expel a partner for serious misconduct or breach of the agreement
- termination of contract provision should be incorporated.
A Partnership Agreement is prepared where two or more people have set up a business together, but have not formed a Limited Liability Company. If a Limited Liability Company is formed, then Shareholders Agreement should be completed.
An uncomplicated Partnership Agreement can be put together in a few days and can cost as little as €1,500 plus VAT. For a wide-ranging Partnership Agreement you should expect a larger fee, as this process can take several weeks to negotiate.
If you would like us to help you, or if you would simply like to have a chat to discuss your options, don’t hesitate to contact us.