A Partnership Agreement is a voluntary contract between two or more parties that confirms that each party is happy to add their money and specific skills into a business. The same agreement then sets out that the consequent profits and losses from that business will be shared in equal measure between the participants.
Entering into business together is an exciting time for the people involved, but it’s crucial that neither partner lose sight of the importance of setting out that business on a solid legal footing.
Similarly, a Shareholder Agreement regulates the relationship between the shareholders of a company (typically this will include the director).
Here is a list of the features most commonly included in most Partnership Agreements:
- commencement and duration of partnership
- business name and location
- ownership of the business property
- details of accounts system and banking arrangements
- financial details of business: capital, current accounts and so on
- the obligations and duties of the partners
- maternity leave
- retirement and expulsion
- any limitations on partners’ authority
Shareholder agreements will also cover:
- shareholder dividend policies
- policy on shareholder dispute
- restrictive covenants
- policy regarding borrowing money and share transfers.
- new shares
- exit arrangements such as retirement or selling or buying each other’s interest etc.
- reserved matters requiring unanimous agreement of shareholders
- mechanism of resolving deadlocks
At Murria Solicitors, we provide a bespoke, quick, effective and efficient Partnership Agreement and Shareholder Agreement service for all types of business arrangements, leaving you to get on with your business in complete confidence.