Partnership Agreements
Many business owners don’t realise they can unintentionally form a legal partnership without ever signing an agreement.
Can You Be in a Partnership Without Realising?
If two or more people are carrying on a business together, they are likely already in a partnership defined by law – whether that was the intention or not.
You could be in an accidental partnership if:
-
You and someone else run a business together even if you are both sole traders
-
You both contribute time, money, or resources
-
You share profits (even informally)
-
You make business decisions together
Contact us for more information.
Contact us today
Even casual or part-time arrangements can meet the legal definition of a partnership which without a formal partnership agreement:
-
You’re personally liable for the business’s debts, including those caused by your partner
-
There’s no clear guidance for handling disagreements or big decisions and no clear rules on profit sharing, roles, or responsibilities
-
If one partner wants to leave, retire, or sell, things can get messy very quickly
What is a Partnership Agreement?
A partnership agreement is a private contract between two or more individuals or entities running a business together. It covers how the business will be managed, how profits and losses are shared, and what happens if things change – like if a partner wants to leave or if a disagreement occurs.
Without a formal agreement in place, the partnership will be governed by default legal rules (such as the Partnership Act 1890 in the UK), which are often outdated and unlikely to suit your needs.
We check the small print, so you don’t have to!
Why Do You Need One?
Even if you’re going into business with friends or family, misunderstandings can happen. A properly drafted agreement helps to:
-
Clearly define each partner’s role and responsibilities
-
Set out how profits (and losses) are shared
-
Establish how key decisions are made
-
Outline what happens if a partner wants to leave, retire, or sell their share
-
Reduce the risk of legal disputes
-
Protect your business from uncertainty or partner conflict
What Should It Include?
Every partnership is different, but a good agreement typically covers:
-
Capital contributions and ownership shares
-
Profit and loss distribution
-
Duties and obligations of each partner
-
Decision-making authority
-
Restrictions on competing activities
-
Procedures for adding or removing partners
-
Dispute resolution mechanisms
-
Exit and dissolution terms
Benefits of seeking professional advice
Forming a partnership may feel informal — but the legal and financial implications are anything but.
Getting professional legal advice ensures that your partnership is properly structured, protected, and prepared for whatever the future holds.
Clarity and Protection
A professionally drafted agreement sets out clear roles, responsibilities, and expectations—reducing the risk of misunderstandings or disputes. The right clauses can prevent small disagreements from escalating into legal battles. And if a dispute does arise, you’ll have a clear process in place for resolving it.
Tailored to You
Every partnership is different. We will draft an agreement that reflects your specific setup, contributions, goals, and risk factors — not a one-size-fits-all template.
We ensure your agreement fits your specific business, goals, and partner relationships—rather than relying on risky, generic templates.
Prepared for the Future
We help you plan ahead thinking about partner exits or dispute resolution—so you’re protected as your business changes and not caught off guard by unexpected events