Who’s to say that a business has to be solitary? In an industry filled with fellow entrepreneurs on endless espionage of monitoring your successes and finding opportunities in your every failure, do you have to take all the blows alone? Win one of them over your team through a business partnership agreement. This allows you to expand your resources, widen your consumer scope, and work with another brand towards a common goal.

Custom Software Business Partnership Agreement Sample

Details
File Format
  • Google Docs
  • MS Word
  • Pages

Size: A4, US

Download

Business Partnership Dissolution Agreement

Details
File Format
  • PDF

Size: 10 KB

Download

Business Partnership Profit Sharing Agreement

Details
File Format
  • PDF

Size: 2 KB

Download

General Business Partnership Agreement

Details
File Format
  • PDF

Size: 11 KB

Download

Small Business Partnership Agreement

Details
File Format
  • PDF

Size: 445 KB

Download

Standard Business Partnership Agreement

Details
File Format
  • PDF

Size: 9 KB

Download

Professional Business Partnership Agreement

Details
File Format
  • PDF

Size: 118 KB

Download

Business Partnership Agreement Checklist

Details
File Format
  • PDF

Size: 188 KB

Download

What Is a Business Partnership Agreement?

Business partnership agreements are binding documents that provide a comprehensive outline of the participating parties’ roles, responsibilities, and conditions. It keeps a detailed account of their affairs, such as operational processes, financial matters, and decision-making methods to clarify their responsibilities in the agreement and avoid future conflict.

According to The Balance Small Business, a clear cut agreement is critical to a partnership deal because of several factors. Among those include its efficiency in resolving conflict. Most agreements provide means to settle conflicts without taking matters to court. It also discusses crucial issues such as liability, confidentiality, tax details, and state laws that are important in maneuvering the partnership’s operations. Because a partnership agreement’s goal is to raise their revenue through a meaningful network, it helps settle how they’ll distribute the profit and deal with the losses.

How to Write a Business Partnership Agreement 

Bedros Keuilian, in his article in the Entrepreneur, dubbed business partnerships as the “kiss of death.” Taking on a partnership offers bigger risks than running a small business on your own or founding a startup business plan in a highly competitive industry. It prompts you to trust another entity and hope your match works for the better.

A successful partnership starts with having a business partnership agreement that provides detailed information about your joint venture and safeguards both parties from incoming complications. Here are some basic ways how:

Step 1: Work Towards a Common Goal

A business agreement should start with something both parties involved already “agreed” to pursue. A unified objective steers the parties’ future course of action. It will help determine the purpose behind their agreement and the benefits they’re going to bring to the table to accomplish their action plans. For example, if a company wants to expand its operations to the vicinity near a prospective partner’s location, the partnership will help them satisfy such a goal. On the other hand, the other party can provide the company with certain resources to help meet their needs and grow their enterprise. Having a mutual objective means you’re treading the same path. It produces a goal-driven agreement they can both benefit from.

Step 2: State the Contributions

The core of your agreement contract is the comprehensive outline of roles and responsibilities each party has to fulfill in upholding the partnership. It answers queries of who should provide the deliverables or services, what tasks should be performed, how much monetary support the other party will receive, and other contributions needed to make the partnership work. Their share of the contributions dictates the percentage of their ownership, making this the highlight of your agreement. This is also where most agreement disputes happen. 

Step 3: Clarify Profit and Loss Division

If there’s one thing that puts entrepreneurs on edge, it’s money talks. It can be challenging to discuss financial processes and obligations when putting together your business agreement. Do parties need to base their profit and loss allocation based on their ownership percentage? Will shares withdrawal occur monthly or annually? Do you want the shares to be strictly equal? These are some things that you need to discuss in the portion of your agreement or contract. It’s best to discuss which options best apply to your situation before finalizing your document.

Step 4: Provide Dispute Solutions

As with any business deals, expect conflicts and disputes to appear in the future. Use your business partnership contract as a way to settle misunderstandings without the need to spend on court hearings. Discuss violations or potential roots for conflict. Decide how you can come up with a solution to avoid scarring your brand names or burning a hefty amount of cash in legal proceedings.

FAQ

What are the different types of business partnerships?

The following are the different types of business partnerships:

  • Limited liability partnership
  • General partnership
  • Limited partnership
  • Limited liability company (LLC) partnership

Do partnerships have tax privileges?

Yes. Partnerships don’t need to pay income tax. Instead, each party files their own share of business profits and losses on a separate federal tax return.

How many people can form a partnership?

Up to 15 individuals can form a partnership.

Building professional networks and transacting with different companies with collaborations and partnerships strengthens your connections and your brand influence. It establishes your name in the industry and helps increase your credibility in the industry. This success level starts with a well-crafted business partnership agreement that can help you land the best partners. Check out our collection and download now!

Related Posts