Many businesses operate successfully as partnerships, a business format favoured by professional partnerships such as Architects, Surveyors, Accountants, Doctors, Farmers, Vets, Lawyers etc. Birkett Long specialise in advising and assisting partnerships of all types. Our expertise has gone a long way to enabling our clients to make the best possible arrangements for their businesses.
What is a partnership?
A partnership is the relationship which exists between people carrying on a business in common with a view to profit. Usually profits are shared between all partners, but that is not an absolute requirement. Partnerships can be created inadvertently and in any business dealings it is always wise to have a written agreement that addresses the nature and terms of relationship, if anything to ensure the arrangement does not become something not intended. Good legal advice will ensure you avoid any misunderstandings.
Why have a partnership agreement?
It is possible to have a partnership without a written agreement; however this can be very risky when things do not go according to plan. The written agreement lays out the rights and duties of all partners and will contain provisions for exit planning so everyone is clear about the process and what an outgoing partner is entitled to. It can also assist the continuing partners by permitting payment by instalments, so as to reduce the burden of finding funds due to a partner leaving.
The agreement also gives the opportunity for all of the partners involved to agree as to how they would like the partnership to operate. Without a written agreement the partners are left to rely on the Partnership Act 1890, the terms of which may not always be appropriate or as intended, for example the Act provides that all profits and losses will be shared equally. Having a written agreement provides a bespoke document, tailored specifically to the needs of the partners and their future intentions.
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If you want to find out more contact our solicitors today.
