Why Every Partnership Needs A Partnership Agreement

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Beyond achieving asset protection and income flexibility goals, it is critical that the business structure can be managed effectively by the principals. Above all, clients require certainty. Certainty is particularly important as regards, for example, the term of the partnership, profit share and capital entitlements, management decisions and veto, the right to terminate the partnership, the right to admit or expel partners and assign partnership interests and what happens in the case of a deadlock or dispute.

Without an effective written partnership agreement between the partners, there is no such certainty. In that case, the partners leave themselves open to the uncertainties and peculiarities of the Partnership Act.

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