Writing a Business Partnership Agreement

Writing a business partnership agreement is an essential and necessary tool in establishing a stable and organized business relationship. It helps to delineate the rights and obligations of the parties as well as provide a projection as to what is to come.

It also serves as a safeguard for both parties when things don?t go on as planned.

Normally, with agreements that involve large sums of money, business partners opt to avail of the services of legal counsel in drafting a business partnership agreement. This is because the business partners want to be sure that the terms and conditions of the agreement are in accordance with the law and that each of their rights is protected. However, though the service of counsel is still the best way to go, writing your own business partnership agreement is neither illegal nor impossible. With the right kind of tools and advice, writing your own business partnership agreement isn’t really that difficult.

In the first two paragraphs of the business partnership agreement, one must show the legal capacity of the parties to enter into that agreement. For example, if it is a person, one must state “I, John Doe, of legal age,” or if it is a corporation ‘ABC Corporation, duly organized and existing in accordance with the laws of ____.” You do the same to the other party. It is also advisable to insert the address of the parties. The agreement itself must be clear and unambiguous. If there is a profit-sharing agreement it is advisable to add what profit exactly means. If there is a time period, be as clear and precise as you can be. Don’t just say monthly disbursement of profit. You may want to say that 10% of the profit for the last month may be collected by Mr. Doe every 15th of each month at the office of ___. ” In agreement writing, it is the clarity and unambiguity that is most important.

Aside from being unambiguous, the parties must also put in the business partnership agreement everything that they have agreed on orally. Though oral agreements are binding to the parties, it is easier to prove that such an agreement exists if the same is in writing. Furthermore, there are just some agreements that the law requires to be put in writing.

One must also be able to think of all possible outcomes of the business partnership. What if the other party doesn’t do his party, what penalty can be placed on him? What if he doesn’t pay on time, will there be interest? How much? What if either party wants out, do you want that to be allowed or not? If yes, what is the procedure? Thinking of everything that may go wrong and providing for them in the business partnership agreement is a vital step in protecting the rights of the parties as well as compelling each party to perform their obligation. For more information, you may also look into online and printed legal forms as well as actual business partnership agreements before drafting your own.


  • selvamveloo said on March 18, 2011
    setup a security company among four partners, all of us go for equal share, two of them not working with the newly setup company and another two will run the business, how to draw a business agreement?
  • karanvir said on April 10, 2011
    Hi.... I karanvir wants to open up an eating joint in partnership .The shop where i'm planning, is in an ancestral building of my side . I'm scared that later on the other party may not claim the property as a part of their business .please guide me how can i secure my ancestral property that if i wish to discontinue and shut down the business joint in future sometime ,the other party shall vacant the shop on my decision .please guide me what should be done about it so that i m safe. best regards karanvir
  • suzanne said on August 17, 2011
    am from cameroon i need a partner from brazil am into shoes and bags i want to come to brazil to buy this things i need a partner from brazil please get back to me as soon as possible thanks


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