Points to Consider When Making a Partnership Agreement

While these are not the only considerations that should be explored when forging an agreement, they are basic. Not every point may be required in your agreement. We suggest that for best results you consult a lawyer.

1. Name of the Partnership

2. Duration of the Partnership - number of years or "Until Dissolved"

3. Location of the offices

4. Capital contribution of each partner

5. Whether Partners may make additional contributions

6. The level at which the Capital Account of the Partnership must be maintained

7. Participation of each partner in profits or losses

8. Salaries, if any, to be paid to Partners and whether or not these salaries are to be treated as Expenses
in distributable profits

9. The amount of any regular drawings against profits

10. Duties, responsibilities, and sphere of activities of each partner

11. The amount of time to be contributed by each partner

12. Prohibition of outside business activities by Partners that would be in competition with the
partnership business

13. Who is to be the managing Partner and whose decision will prevail in case of a tie or a dispute?

14. Procedure for admitting new Partners

15. Methods of admitting Junior Partners, without capital, if such a procedure is considered desirable

16. Method of determining the value of goodwill in the business, in case of death, incompetence,
or withdrawal of a Partner or dissolution of the Partnership for any other reason

17. Methods of liquidating the interest of a deceased or retired Partner

18. Age at which a Partner must withdraw from active participation, and arrangements for adjusting the
salaries and equity

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19. Whether or not the surviving Partners shall have the right to continue using the name of a deceased
Partner in the Partnership name

20. Period of time in which retiring or withdrawing Partners may not engage in a competing business

21. Basis for expulsion of a Partner, method of notification of expulsion, and the-disposition of any losses
that arise from the delinquency of such a Partner

22. How will the event of protracted disability of a Partner be handled?

23. Whether the Accounts are to be kept on a Cash or Accrual basis, and if on the Cash basis, the method
of compensating Partners who withdraw or retire for income realized on services rendered, but not
invoiced, at the time of their withdrawal or retirement

24. The Fiscal Year of the Partnership

25. Whether or not interest is to be pain on the debit and credit balances in the Partner's accounts

26. Where the Partnership cash will be deposited and who may sign checks

27. Whether or not all Partners shall have access to the Book of Accounts

28. Under what conditions Limited Partners may be accepted into the firm, and, if so, who shall be
designated as the General Partner

29. Prohibition of the Partners pledging, selling, hypothecating. Or in any manner transferring their
interest in the Partnership except to other Partners

30. Identification of material contracts or agreements affecting the liability or operation of the partnership