A partnership agreement formalises the business relationship between two partners. It can cover everything from low-level processes, up to how dispute resolution will take place in the business.
Business partners are personally liable for the business in a partnership, therefore, determining the finer details is extremely important and can prevent complications down the line. The agreement will help allocate the responsibilities and obligations of each partner. It will also help establish the rights of each partner and how profits and losses will be distributed amongst partners.
An agreement should take the following into consideration for it to be an effective piece of documentation: