A general partnership agreement is a crucial document that outlines the terms and conditions under which two or more individuals or entities come together to run a business. While the specifics of a partnership agreement may vary depending on the nature of the business, there are several key provisions that should typically be included in a general partnership agreement in Wisconsin.
Partners' Contributions
The agreement should detail the initial contributions made by each partner, whether in the form of capital, property, or services. This provision ensures transparency and equity among the partners.
Capital Accounts
Describe how capital accounts will be maintained, including the accounting for contributions and withdrawals by each partner.
Distributions
Outline the procedure for distributing profits to the partners. This provision should address whether distributions will be made regularly or under specific circumstances.
Admission and Withdrawal of Partners
Specify the process for admitting new partners and the conditions under which a partner can withdraw from the partnership. This helps manage transitions and maintains stability.
Dispute Resolution
Establish a mechanism for resolving disputes among partners, whether through mediation, arbitration, or another agreed-upon method. This can save the partnership from costly legal battles.
Non-Compete and Confidentiality Clauses
Include clauses in the partnership agreement form that prevent partners from engaging in competing businesses and disclose confidential information about the partnership.
Term and Termination
Define the duration of the partnership and the circumstances under which it can be terminated, such as partner retirement, death, or unanimous consent.
Buy-Sell Agreement
Consider including a buy-sell agreement that outlines how a partner's interest can be bought or sold in the event of certain triggering events, such as disability or divorce.
Tax Provisions
Address in the legal forms online how taxes will be handled, including how income, losses, and tax liabilities will be allocated among the partners.
Insurance
Determine whether the partnership will maintain any specific insurance policies, such as liability or key-person insurance.
Exit Strategy
It is essential to have a plan for winding down the partnership, including the disposition of assets and the distribution of remaining profits.
Amendment Procedures
Outline the process for making changes to the partnership agreement itself. This should typically require the unanimous consent of the partners to prevent unilateral changes.
Applicable Law
Specify the governing law that will apply to the partnership agreement, which can be important if legal issues arise.
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Carl writes often about legal drafting of rental & commercial lease agreements, power of attorney and partnership agreements to help the people in needs.