Businesses that are looking to enter into a partnership will benefit from consulting with this partnership agreement sample.
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PARTNERSHIP AGREEMENT
THIS AGREEMENT made in duplicate this _____ day of ______________________, 20_____.
BETWEEN:
_____________________________ of the City of ____________________ in the
Province of _________________ ( 51% Ownership)(hereinafter referred to as
”_______________________________”) OF THE FIRST PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE SECOND PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE THIRD PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE FOURTH PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE FIFTH PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE SIXTH PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE SEVENTH PART
AND:
_____________________________ of the City of ____________________ in the
Province of _________________ ( % Ownership)(hereinafter referred to as
”_______________________________”) OF THE EIGHTH PART
WHEREAS ________________________________ and ________________________________
have decided to enter into a partnership for the purpose of carrying on the business of __________________ and all other businesses which can be carried on expediently or incidentally in connection with such business.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and agreements herein contained the parties hereto agree as follows:
- To enter into partnership effective as of the _____ day of ________________________, ______, upon and subject to the terms, conditions and stipulations set forth in this agreement.
- Subject to the provisions herein contained, the partnership shall continue until either partner notifies the other partner in writing that he is terminating the partnership and the partnership shall terminate at the expiration of six (6) months after the giving of such notice provided that with the consent in writing of both the partners the partnership may be terminated without notice and on such date as may be specified in such consent.
- The name of the partnership shall be _______________________ and the business of the partnership shall be that of ___________________and all other businesses which can be carried on expediently or incidentally in connection with such business.
- The bankers of the partnership shall be in the City of ______________, in the Province of __________________ and/or such other bank or banks as the partners shall from time to time agree upon. All cheques, drafts and other instruments and documents on behalf of the partnership shall be signed by (and only by) both the partners or by such persons as are from time to time designated in writing by both the partners. All partnership money shall as and when received by paid and deposited with the bankers of the partnership to the credit of the partnership account.
- It is agreed that:
- If at any time hereafter and from time to time capital and/or further capital is required for carrying on the business of the partnership such capital shall be advanced by the partners in equal shares provided and it is understood that if any partner shall with the consent of the other partner bring in additional capital or leave any part of his profits in the business the same shall be considered a debt due to him form the partnership and shall bear interest at the rate of ____% per annum but the same shall not be drawn out except upon giving _________ days written notice; and he shall be bound to draw out the same on a like notice given to him by the other partner and at the expiration of such period interest shall cease to be payable thereon. Subject to the foregoing any and all capital of the partnership from time to time belongs in equal shares to the partners.
- The profits of the partnership shall be divided equally between the partners; and
- The expenses and losses of the partnership in any one partnership year shall in the first place be paid out of the earnings of the partnership for that year and if such earnings shall be insufficient to pay all expenses and losses as aforesaid the deficiency shall, unless otherwise agreed, be made up by the partners equally.
- It is agreed that at the end of the period commencing at the date hereof and continuing up to and including the _____ day of _____________, ____, and at the end of each partnership year thereafter terminating on the _____ day of ___________. ______________________________________ or such other chartered accountant or firm of chartered accountants as approved by the partners from time to time (herein referred to as the ”Auditor”) shall forthwith make an examination of the financial statement of the partnership as prepared by the partner and shall make a report to the partners on the financial statement and shall state in the report whether in the Auditor’s opinion the financial statement referred to therein presents fairly the financial position of the partnership. For such purpose the Auditor shall have access to all books of account and records and all vouchers, cheques, papers and documents of or which may relate to the partnership business. A copy of such report shall be furnished forthwith upon its preparation to each partner who shall be bound thereby unless one of the partners objects and notice thereof is given to the Auditor who prepared the same within __________ days after the furnishing of a copy thereof as aforesaid, in which case the Auditor shall reconsider the report and revise the same If the Auditor considers it necessary to do so provided that the Auditor shall have the sole and final decision as to whether any revision is necessary. Immediately after the aforesaid period of __________ days or immediately after the revision of the report by the Auditor or immediately after the Auditor has advised the objecting partner that he considers no revision is necessary as the case may be the net profits, if any, shown by the profit and loss account as modified by the Auditor’s report if such is the case shall, unless the partners otherwise agree, be divided equally between the partners.
- If at any time either of the partners is required to pay or become personally liable for more than his proportion of the partnership debts as provided for in subparagraph (c) or paragraph 5, such partner shall have as against the other partner a right of recovery of the appropriate proportion of such payment for indemnification against such liability and the partner shall have on becoming liable for such debt a first lien or charge on the capital and all other interest or interests of the offending partner in the partnership business.
- Neither partner shall without the previous consent in writing of the other assign or encumber his share or interest in the partnership.
- Each of the partners shall at all times duly and punctually pay and discharge his separate debts, liabilities, obligations, duties and agreements whether present or future and keep indemnified and save harmless the partnership property and the other partner and his estate and effects from all actions, proceedings, costs, claims and demands of every nature or kind whatsoever.
- Unless otherwise agreed, upon the dissolution of the partnership pursuant to paragraph 13 hereof or upon the termination of the partnership pursuant to paragraph 2 hereof the Surviving Partner (”Surviving Partner” as used in this Agreement means the partner to whom notice of termination is given under paragraph 2 hereof; the partner living or of sound mind under sub-paragraphs (a) and (b) of paragraph 13 hereof; or the partner who elects to terminate the partnership under sub-paragraphs (c) and (d) of paragraph 13 hereof and ”Retiring Partner” as used in this Agreement means the person who give notice of termination under paragraph 2 hereof; the personal representatives or the committee of the partner who has died or has become a mental incompetent under sub-paragraphs (a) and (b) of paragraph 13 hereof; or the partner who receives notice of termination under sub-paragraphs (c) and (d) of paragraph 13 hereof) shall have the right to purchase the share of the Retiring Partner in the capital assets of the business on the following terms and conditions:
- The Auditor for the partnership shall forthwith upon such termination or dissolution make an examination of the financial statement of the partnership as prepared by the Surviving Partner made up to the date of such dissolution or termination and shall make a report on such financial statement of the same nature as provided for in paragraph 6 hereof and shall determine the value of the share of the Retiring Partner which shall be one half of the amount at which the net assets of the partnership shall stand in the balance sheet (excluding therefrom the net profits of the partnership up to and including the date of termination or dissolution which net profit shall be divided equally between the partners or their legal representatives as the case may be) of the partnership as modified by the Auditor’s report if such is the case as the date of termination or dissolution and in preparing his report the Auditor shall have regard to and make all proper and necessary allowances in respect of depreciation, actually or reasonably estimated profits and losses on transactions which have been partially or entirely completed but in connection with which the profits and losses have not been carried into the books of the partnership and contingent or other reserves but shall make no allowance for goodwill. In preparing such report the value which shall be attributed to the fixed and other assets (excluding goodwill) of the partnership shall be as may be agreed upon by the partners (including the personal representatives of a deceased partner or the committee of a mentally incompetent partner or the retiring partner as the case may be) or failing such agreement shall be as determined by the Auditor, provided that the Auditor shall have the right to retain an appraiser at the expense of the partnership to assist him in making such valuation if he so desires. The valuation of the Auditor shall be final and conclusive. The value of the share of the Retiring Partner so determined by the Auditor shall be the amount of the purchase price of such share and shall be conclusive and binding upon the Surviving Partner and the Retiring Partner;
- The amount of the purchase price of the share of the Retiring Partner as calculated shall be paid to the Retiring Partner as follows; _____ thereof shall be paid within ________ days after the preparation of the Auditor’s report referred to in sub-paragraph (a) of this paragraph and the balance shall be paid in equal installments at the expiration of _______ year, ______ years and ______ years from the expiration of the period of _________ days; provided however that the whole or any part of the purchase price remaining unpaid may be paid at any time without notice or bonus; the purchase price shall not bear interest upon the portion thereof remaining unpaid from time to time;
- The Surviving Partners shall also enter into a covenant to indemnify the Retiring Partner against the debts, engagements and liabilities of the partnership both existing and future;
- Upon all the aforementioned payments being made and the covenant to indemnify having been given, the Retiring Partner shall execute and do all acts, matters and things necessary or proper for vesting the share of the Retiring Partner in the Surviving Partner and enabling the Surviving Partner to recover and get in the outstanding assets of the partnership.
- In the event that the Surviving partner elects not to purchase the share of the Retiring Partner he shall give notice in writing of such election to the Retiring Partner within ________ days after the preparation of the Auditor’s Report referred to in sub-paragraph (a) of paragraph 10 and in that case the Retiring Partner shall have the right, upon electing to do so within ________ days, to acquire the interest of the other partner in the partnership upon the same terms and conditions and for the same consideration as set forth in paragraph 10 hereof.
- (a) If the partnership is dissolved or terminated and neither the Surviving Partner nor the Retiring Partner elects to purchase the assets from the other partner within he periods and upon the terms and conditions provided for herein and if not other arrangement is made the assets of the partnership shall be realized and the Auditor shall forthwith prepare a Report on the Financial Statement as prepared by the Surviving Partner made up to the date of the realization of the last of the assets of the partnership. The assets so realized shall then be applied first on the payment of the debts and liabilities of the partnership including any and all contributed capital which constitutes a debt pursuant to sub-paragraph (a) of paragraph 5 of this Agreement (second for payment to each of the partners of the amount of his capital, if any, in the partnership) and the surplus of the assets so realized, if any, shall be divided equally between the partners. The value of the share of each partner so determined by the aforesaid financial statement as modified by the Auditor’s Report if such is the case shall be conclusive and binding upon the parties hereto and their personal representatives.
- Notwithstanding anything in this Agreement contained if both the Surviving Partner and the Continuing Partner notify the Auditor within ________ days of the termination or dissolution of the partnership that they do not wish to exercise the respective rights given to them by paragraphs 10 and 11 hereof then the Auditor shall proceed forthwith after the realization of the assets to prepare a report as provided for in paragraph 12 hereof without proceeding to prepare the Auditor’s Report required by paragraphs 10 and 11 hereof.
- Subject to any and all subsequent agreements to the contrary this partnership shall dissolve on the date of the happening of any one of the following events:(a) Upon the death of either of the partners;(b) If either of the partners become of unsound mind or be found by any court of competent jurisdiction to be mentally incompetent;
(c) At the option and in the sole discretion of a partner upon the violation of paragraph 8 hereof by the other partner; and
(d) At the option and in the sole discretion of a partner upon the insolvency or bankruptcy of the other partner.
In the event of termination pursuant of sub-paragraphs (c) and (d) hereof the date of termination shall be the date upon which notice is given of the election to terminate.
- The partners agree to devote their full time and energy during normal working hours to the business of the partnership.
- Each partner may draw on account of his profits such amount or amounts as may be agreed upon by the partners from time to time but if at the periodical taking of accounts herein referred to either partner has drawn out during the past year a sum exceeding the profits to which he is entitled he shall repay the excess to the partnership.
- Proper accounts shall be kept in books of all partnership transactions and such books, together with all other documents connected with the partnership business, shall be kept at the principal place of business and accessible to each partner.
- All differences or disputes which arise between the partners or between either of them and the personal representatives or committees of the other to them or between the personal representatives and committees of the partners and whether during or after the termination of the partnership and whether in relation to the interpretation of the Agreement or to any act or omission of any party to the dispute or to any act which ought to be done by the parties in dispute or in relation to any other matter whatsoever touching the partnership affairs shall be referred to a single arbitrator to be agreed upon by the parties to the dispute and in default of agreement to a single arbitrator appointed by the court under the provisions of The Arbitration Act of ______________. The award of determination which shall be made by such arbitrator shall be financial and binding upon the partners hereto, their heirs, executors, administrators, assigns and committees and there shall be no appeal from such award or determination, provided however that in any and all cases where the Auditor exercises any discretion exercisable by him under this Agreement such decision shall bear final and binding upon the parties and their personal representatives or committees and shall not be subject to the arbitration provisions provided for herein.
- Any notice required or permitted to be given hereunder to either partner or the personal representatives or committees of either partner shall be in writing and shall be given by prepaid registered letter addressed to ______________________ at ______________________, _____________________ or by delivering the same to _____________________________, his personal representatives or committees, as the case may be, and to ___________________________ at _______________________, _________________ or by delivering the same to ___________________________, his personal representative or committee, as the case may be.
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals this _______ day of ______________________, 19_____.
SIGNED, SEALED AND DELIVERED
in the presence of )
)
)
) ____________________________________
)
) ____________________________________
The attached Partnership Agreement and Partnership Agreement Check List is provided by the TEWATOHNHI’SAKTHA Kahnawà:ke Economic Development Commission to you for your information and assistance only. Please note that the Agreement and Check List must be adapted to your own particular circumstances and the needs of your business. We strongly recommend that you obtain independent advice from you own lawyer and/or accountant in this regard before entering into any agreements.