Partnership Agreement Contract
In the business world, it is very common to develop a partnership form of business. It means that your company owned by not only one person. Each owner should contribute an amount of capital to gain a benefit in the future, or called dividend. As the owner, of course, they have some privileges to make a policy for managing their business.
But, before a person or an organization decide to carry out other parties businesses, they have to make an agreement, called partnership agreement contract. It contains some rights and responsibility among partners. This contract is an important document for starting a new business. The function of this contract is to protect money or another capital contributed by each partner from losing risk.
There are two forms of these agreements: General partnership and limited liability partnership. In a limited liability partnership, the liability of a company couldn’t be paid by the owner’s personal wealth. While, in a general partnership, the owners have full responsibility to pay the firm’s operational expense and liability even using their personal capital.
How to make a partnership agreement contract
After knowing much about these agreements, it is very important for you to know how to make a partnership agreement contract correctly. It is to avoid an illegal contract assessment by the courthouse and appearing unwanted problem in the future. In general, the format of this agreement consists of :
Name and place of the partnership
The owners have to register the name of the partnership as a business name. This name will be noted in the certificate of registration issued by the corporate affairs commission. The place of business is describing the place where the businesses are established.
Partner of business
This data describes all of the parties involved in business ownership. As explained earlier, the owners’ involvement in managing business regarding the type of their agreements purpose.
The owner’s capital contribution is its initial contribution to the company. It can be in the form of money, properties, vehicle, land, and so on. The contributed amount will affect the dividend distribution at the end of the period.
Profit and loss distribution
This part will show how much the profit and losses that will be distributed among partners. The portion of both elements relies on the percentage of their capital contribution and the management involvements to the business. Besides that, the owner also can see how many their portion of interest percentage in the Ownership’s Interest point.
After finishing the documents, each owner has to sign the agreements contract and give different witnesses for each person. Each of them also has to keep at least one copy of this signed document for record purposes.
That all about the guidance to make this kind of contract. If you want to know completely about the Partnership Agreement Contract, you can visit a public company websites and see each point clearly. Please check your document carefully before going to the court if you are interested to join another company.