A general partnership agreement is a contract between two or more parties who wish to manage and operate a business together with the goal of making profit. Under the general partnership agreement, each partner will be personally responsible for the losses of the partnership. This means that the financial losses of the partnership will also be financial losses for the partners and the same will apply to the general partnership's profits.
No, it is not mandatory to have a written general partnership agreement. This is because in the UK, if there is no written general partnership agreement, the general partnership will be governed by the legislation (Partnership Act 1890). However, if the partners would like to have specific terms for their business, it would be advisable to have a general partnership agreement that accurately reflects the intentions of the partners.
A general partnership is not just restricted to individuals. This means that different entities can be partners and, as such, parties to the general partnership agreement. These include private individuals, companies, another partnership (general partnership or limited partnership) or a limited liability partnership.
A general partnership has no required duration, as it usually exists for the lifetime of the general partnership. This means that it can be indefinite, and can be amended at any time by the partners as long as they are in agreement. The general partnership agreement will no longer function when the partnership is ended.
Once the general partnership agreement is complete, it should be signed by all the parties who will be partners. If a party is a company or LLP, the agreement should be signed by the person who has the authority to sign it (e.g. HR Director for a company, Direct Partner for LLP). Each partner should also keep copies of the agreement for their records.
No, it is not necessary to notarise the general partnership agreement.
No, it is not necessary to register the general partnership agreement. This is because the general partnership is not a corporate entity and, as such, has no duty to register or file with the companies house.
Yes, it is good practice to have witnesses for the general partnership agreement. The presence of witnesses to the signing shows that the parties have read through the agreement and understand what they are signing. A valid witness must be a person who is at least 18 years old and not related to any of the parties to the agreement.
A general partnership agreement should contain:
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General Partnership Agreement - Template - Word and PDF
Country: United Kingdom