Partnership Agreements

Partnership Agreement Solicitors

Contact Us Today

Rose & Rose

Putting Clear Agreements in Place Between Business Partners

Going into business with someone is usually built on trust. You have a shared idea, a plan for where the business is going and an understanding of what each of you will bring to it.

What often gets pushed aside amongst the excitement of setting up a business are the more difficult conversations. What happens if one business partner wants to leave or if you disagree over a major decision? Should profits always be split equally? What happens if one person is putting significantly more time or money than another?

Those questions are far easier to deal with while everyone is getting along. A properly drafted partnership agreement sets out how your business will operate and what each partner can expect from the other. Without one, default legal rules can apply, which may be very different from the arrangement you thought you had agreed to.

Our business law solicitors at Rose & Rose can draft partnership agreements for new and established businesses, review existing agreements and advise in situations where the circumstances of the partnership have changed. We can also advise on a wide range of partnership matters, including partnership and shareholder disputes.

Talk to our Business Law Solicitors Today

Get Legal Advice

Setting Up a Partnership Agreement

No two partnerships operate exactly in the same way, so a partnership agreement should reflect how the business actually works and what each partner expects from the arrangement.

Depending on the partnership, the agreement may deal with:

How much money or other assets each partner is contributing to the business
How profits and losses will be divided
Drawings, salaries and other payments to partners
The roles and responsibilities of each partner
How day-to-day and major business decisions will be made
Whether certain decisions need the agreement of all partners
Who has authority to enter into contracts or make financial commitments on behalf of the business
Bringing new partners into the business
What happens if a partner wishes to retire or leave
How a departing partner’s interest in the business will be valued
What happens following the death, illness or incapacity of a partner
Confidentiality and the protection of commercially sensitive information
Restrictions on a departing partner competing with the business or approaching its clients
How disagreements between the partners should be dealt with
What happens if the partnership eventually needs to be sold or brought to an end

The right agreement should reflect the commercial reality rather than simply include a long list of template clauses. Our business law team will explain what the provisions mean and, importantly, how they could affect you if they ever need to be used.

Reviewing an Existing Partnership Agreement

If you already have a partnership agreement in place, it is worth reviewing it every few years. The focus and value of your businesses can change, and the founders or partners may develop different objectives. The agreement that worked at the launch of your business may no longer suit your needs, especially if you have added new partners or if someone reduces their involvement.

It is particularly worth reviewing the agreement if:

A new partner is joining.
An existing partner is leaving or retiring.
The ownership or profit-sharing arrangements are changing.
One partner is increasing or reducing their involvement.
There has been a significant change in the value or direction of the business.
The partners are beginning to disagree about how the business should be run.

Addressing those issues while relationships are still workable is usually much easier than renegotiating the agreement once a serious dispute has developed.

We regularly review agreements and update them to reflect how the business operates today.

Meet the team

Meet the team working for you. Click the photo to view that team members profile or use the button to send them an email.

Partnership Disputes – When the Relationship Breaks Down

If a dispute has already developed, our Business Disputes team can review the partnership agreement and advise you on the options available. Depending on the circumstances, this may include negotiation or another form of dispute resolution, with court proceedings considered where a matter cannot be resolved another way. Rose & Rose already advises on partnership disputes as part of its wider commercial dispute work. Getting advice early can also help stop a disagreement becoming a much bigger problem for the business.

You can read more on our Partnership and Shareholder Dispute Solicitors.

Linked Legal Services

Changes within a partnership can affect more than the business itself. Our wider legal teams can advise where partnership matters overlap with commercial property, employment arrangements or your personal affairs. If you own an interest in a business, it is also sensible to consider how that interest is dealt with under your Will and what would happen to the business if you were unable to make decisions yourself.

Our Private Client team can advise on writing a Will and setting up Lasting Powers of Attorney alongside the business arrangements, helping to ensure the different parts of your legal planning work together.

Speak to our Business Law Team

To discuss putting a partnership agreement in place, or to have an existing one reviewed, please contact us on 0208 974 7490 or info@roselegal.co.uk, and we will be happy to discuss your requirements.