An association between any two parties or entities that run a business in common to share profit as co-owners is called a Partnership. A legal documentation between two parties for the above said purpose is called a Partnership Agreement.
You will need to use an agreement between you and your partners. It forms the foundation of your new business, defining how the partnership will be conducted. You might want to make use of a partnership agreement as soon as you decide to form a contract and you wish to define the terms of your new business. Get yourselves the perfect partnership agreement designed to suit your needs and give a strong base to your business deal.
A solid legal basis and lucid communication help you get your business kick off on the right track. You will have to define all the ins and outs of your dealings whether you are planning to start up a business with a colleague or a friend. Signing a contract helps you in many different ways like set up common business scenarios, map how a partner may leave, avoid everyday misunderstanding between partners by easily setting out clear business expectations, and how will the disproportionate contributions be handled in the partnership.
Other terms in this official document can cater to profits, interests, buyout options, contributions, and dissolution. However, there are some essential terms a good Agreement Template, like ours, must hold: purpose, the formation of the partnership, meetings, value of partnership, capital account, books of accounts, sharing of profits and losses, and annual accounting.
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