General

Partnership agreement contents could impact resolution of dispute

Businesses located in the Orlando, Florida, area are organized in different ways. Depending on the goals of the business it is possible that it could be in the form of a business partnership. Because litigation is always a possibility in business it is vital that the partnership agreement created include certain things.

The first is the duties that each partner will undertake. The responsibilities that should be outlined include the important management duties, decision-making power and level of authority.

Second, the partnership agreement should indicate the percentage of ownership interest each partner will have as well as the specific capital contributions, such as assets, securities, property and cash that each partner will contribute.

Next, the partnership agreement should contain a clause regarding the acceptance of liabilities each partner will undertake. Since this will vary depending on the specific type of partnership entered into, it is important to address.

Another important element to address in the partnership agreement is how much of the profits and losses each person will get and be responsible for respectively. While the approach can be whatever the partners decide, it generally corresponds to the ownership percentage of each partner.

Business partnerships do not always go as planned. Accordingly it is important to include a clause in the partnership agreement that addresses how any disputes between the partners should be addressed. Such a clause could require that mediation or arbitration be pursued before the matter is taken to court.

When a partnership dispute arises there could be a lot at stake. Accordingly, it is important that those involved take steps to protect what is theirs. In most cases the best way to do this is work with a lawyer who handles partnership disputes.

Source: FindLaw, “5 Clauses Every Partnership Agreement Should Include,” Aditi Mukherji, Oct. 9, 2013

Mon Aug 27, 2:13pm