What key terms would you as a prospective partner require in a partnership agreement?
A partnership agreement will provide a written structure for your business clearly setting out each partner's responsibilities, rights, profit/liability sharing, rules relating to business entry and exit, [ and also the terms on which disputes are resolved and the partnership can be terminated.Key areas to cover in your partnership agreement include:
a) ownership interests, taking into account
any cash, assets, loans or investments made by individual partners
b} salaries and compensation: how will profits or losses be allocated?
c} how the partnership will be managed
d) each partner's specific responsibilities within the business, and what level of performance is expected from them
e) whether partners expected to make a full-time commitment to the venture, or are permitted involvement in other business activities
f) what processes should be followed if one partner wants to leave the partnership or a new partner is admitted
g) whether partners will be allowed to sell their interests in the business to outsiders and, if so, how will their share be valued
h) on what grounds a partner can be expelled from the partnership (e.g. misconduct, non-performance of duties)
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