Partnership Agreement Drafting

The drafting questions that matter for a general partnership are the same questions that matter for any joint commercial endeavour: what are we putting in, how do we share what comes out, who decides what, and what happens when one of us leaves or wants to leave. A partnership is a particularly demanding form because the partners are jointly and severally liable for the partnership's obligations, meaning a creditor can pursue any partner for the entire debt.

What a partnership agreement needs to address

A written partnership agreement is essential for any business partnership. Without one, the Partnership Act 1890 applies by default, which means all partners share profits equally regardless of their contributions, and any partner can dissolve the partnership at any time. A properly drafted agreement puts you in control and significantly reduces the risk of disputes.

Joint and several liability sharpens the questions of who has the authority to bind the partnership, and what controls exist on individual partners. A good partnership agreement is realistic about this and provides clear authority limits, clear admission and retirement procedures, and a clear basis for valuing a partner's interest on exit.

The agreement covers capital contributions, profit and loss sharing, drawings, management and decision-making, restrictive covenants, retirement, expulsion, and dissolution. It is tailored to the specific circumstances of the partnership and the commercial arrangements between the partners.

Example: a typical scope and fixed fee

For a partnership of two to four partners with a standard structure, the typical scope looks like this.

What's included

• A consultation to understand the partnership structure, contributions, and commercial arrangements
• Drafting of a partnership agreement for up to four partners, covering capital contributions, profit and loss sharing, drawings, management and decision-making, restrictive covenants, retirement, expulsion, and dissolution
• One round of revisions based on your feedback
• Final version ready for execution by all partners

What's outside this scope

• Partnerships with five or more partners (I can quote separately)
• Multi-tier or LLP conversion structures
• Property partnerships or partnerships holding significant real estate (additional provisions required)
• Negotiation with the other party beyond the scope described above
• Tax advice

Fixed fee: £850, no VAT.

How I will approach your matter

Once you have instructed me, I will arrange a consultation to understand the partnership structure, contributions, and commercial arrangements before drafting. The first draft reflects the structure we have agreed on; the revision round refines it against your feedback. I will deliver a final version ready for execution by all partners.

Common questions

What if we have more than four partners?

Partnerships with five or more partners often involve more complex governance, voting, and profit-sharing arrangements. I can provide a quote after a short consultation to understand the structure.

How is this different from an LLP agreement?

A traditional partnership does not have a separate legal personality, and partners have unlimited liability for the partnership's debts. An LLP is a separate legal entity, and members' liability is limited. The choice between the two has significant legal and tax implications.