Partnership agreements define a business partnership. It is a contract between two or more business partners and is used to establish the responsibilities of each partner as well as other rules about the general partnership.
Partnership agreements often include percentage of ownership, division of profit and loss, length of the partnership, decision making and dispute resolution options, partner authority and withdrawal or death of a partner. In addition, conditions of admitting a new partner should be detailed, even if that is not the intention at the outset. Every partnership agreement should include setting forth the names of the individual partners that form the business, stating the purpose, and the principal location of business. Often the document will establish directives.
Each partnership agreement should be tailored to the type of business that is covered and let the partners know terms and conditions that will apply to both them and the business. Setting clear expectations at the beginning of your partnership will be a key to your successfully working together. As time goes by and conditions change, that agreement can be amended or changed as needed but should be reviewed regularly (annually is recommended) and updated as needed, with all partners agreeing to and being aware of the changes.
This can be a simple document or very detailed, as the business dictates but involving an attorney will help all parties be assured that legally, it is a sound foundation on which to build.