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Partnership agreements: What they are and how you create them.
Learn how business partners should outline roles and responsibilities.
A partnership agreement makes 3 things clear
- Who owns how much of a business.
- Who’s responsible for day-to-day operations.
- What happens if a business changes or dissolves.
What is a partnership agreement?
Businesses thrive day to day because of relationships with clients, vendors, suppliers, and customers. The internal relationships between the business owners (who own parts of the company) and individual partners (who usually have business obligations in addition to ownership) are just as important. Those relationships inform how the business works at a high level, how profits and debts are distributed, and how the business will grow and allocate resources.
Those relationships are formalized through a partnership agreement, which outlines the business structure, the allocation of partnership interest, and who’s responsible for what on a daily basis.
4. Limited liability limited partnerships
Limited liability limited partnerships (LLLPs) are a newer type of partnership and not available in all states. For the most part, they operate like LPs but limit the general partners’ liability. Like in an LP, the general partners are fully responsible for the day-to-day running of the business, but they have liability protection just like the limited partners do.
If a partner leaves, their former partners often won’t want them taking their knowledge, expertise, and inside information to the competition. Noncompete clauses prevent exactly that kind of exodus, and bar former partners from taking their talents elsewhere in the industry for a certain amount of time.
Some state laws don’t allow noncompete clauses.
Get partnership agreements signed faster.
With Acrobat Sign, everyone involved in a partnership can review and sign agreements fast.
Electronic signatures are a secure, legal, and efficient way to make sure every dotted line has the name it needs, and get business going quickly.
Plus, security measures — like password-protection for PDFs and identity authentication for signing — help keep documents secure so you can focus on running your business, and make your partnership flourish for everyone involved.