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A partnership agreement is a private contract between the people who share a business. It says who puts in what, who decides, how profit is split and what happens when someone leaves. This page has a free template you can download and a short guide to filling it in.
Download the free template
| File | Format |
|---|---|
| General partnership agreement | Word (.docx) |
| General partnership agreement | Plain text (.txt) |
We wrote the text ourselves. It is plain and generic, with items in [square brackets] for you to replace. It is not legal or tax advice and is not written for any one state. Read it, change it to fit, and have a lawyer check it before you sign.
What is in the template
The template has sixteen short sections and a schedule for partner details:
- The partnership, its business and how long it runs.
- Each partner's starting contribution, in money, property or work.
- How profits and losses are shared, and how money is taken out.
- Management and the decisions that need every partner or a set share of them.
- Duties between partners, books, the bank account, taxes and insurance.
- Selling a share, leaving, death or disability, and a buyout method.
- Disagreements, with mediation before anyone ends the deal.
- How the partnership ends and how what is left is shared.
Schedule A is one table where each partner lists a name, address, contribution, share and role.
Partnership tax basics
The IRS describes a partnership on its partnerships page as the relationship between two or more people to do trade or business. A partnership does not pay income tax. It passes profits or losses through to the partners. It files Form 1065, and it gives each partner a Schedule K-1 so the partner can report their share.
Most partnerships need an EIN. See how to get an EIN.
Liability is the big point
The SBA explains in its business structure guide that general partners have unlimited personal liability unless the business is structured as a limited partnership. Your agreement cannot change that for creditors. If liability protection matters, read LLC vs corporation and business entity types before you start.
Filing and names
A general partnership is usually not created by a state filing. If the partnership trades under a name other than the partners' own, a name registration may still be needed with a state or county. Rules differ. See DBA vs LLC and the guides for Texas and Florida.
How to fill it in
- Write every partner's full legal name and address in Schedule A.
- Agree the percentages first and write them down. Do this before money moves.
- Decide which decisions need everyone. Borrowing and new partners are the usual ones.
- Choose a buyout method now, while nobody is leaving.
- Sign, date and give each partner a copy.
If the business later becomes an LLC, move to an operating agreement and a multi-member LLC agreement. Corporations use bylaws instead, see the bylaws template.
This is general information, not legal or tax advice. A lawyer in your state should review the final document.
Thinking of a structure with liability protection? Start your LLC.