What Is the Purpose of a Partnership Agreement?
A partnership agreement is important in a number of ways: it sets out the parameters for a working business relationship and can be referred to if legal questions or conflicts arise.FunctionA partnership agreement sets out a number of roles for the partners, including the name of the company, the property owned by the partnership and by each individual partner, managerial and financial roles, information on shares and any other information the partners want to have expressed.Property OwnershipDetailing which of the partners owns what portions of the company is the easiest way to avoid legal conflict over property and money. Both partners, through the agreement, consent to and acknowledge their ownership and their partner’s ownership.RolesIn a partnership, one partner usually operates the finances and the other works on managerial roles. Explaining the role that each partner is expected to play creates structure for the partnership and helps reduce the chances of one partner oversteppin
