What Is a Partnership Agreement?
A partnership agreement is a legal agreement between two or more parties to establish the terms and conditions of the partnership. The partners agree to share the profits, losses, and liabilities of the business.
What Are the Types of Partnership Agreements?
There are two types of partnership agreements:
General partnerships: In a general partnership, all partners are liable for the debts and liabilities of the business.
Limited partnerships: In a limited partnership, only some partners are liable for the debts and liabilities of the business.
Why do you need a Partnership Agreement?
A partnership agreement is important because it establishes the rights and responsibilities of each partner. It also sets out how profits and losses will be shared among the partners. Without a partnership agreement, partners may have disagreements about the business, which could lead to the dissolution of the partnership.
What Does a Partnership Agreement Include?
A partnership agreement should include provisions on the following topics:
- The business name and address
- The partners’ names and addresses
- The nature of the business
- The term of the partnership
- The partners’ roles and responsibilities
- How profits and losses will be shared among the partners
- What happens if a partner dies or leaves the partnership.
It is important to seek legal advice when drafting a partnership agreement to make sure that it is properly tailored to your company. OneCompany can help you draft a custom partnership agreement for your Malaysian business that takes into account your company’s specific needs and requirements.