How to Write a Partnership Agreement for Your Startup or Small Business
Forming a business with one or more partners? Don’t skip the paperwork. A clear and legally enforceable Partnership Agreement helps prevent confusion, arguments, and financial disputes down the road.
This guide will show you:
- How to format a partnership contract
- What sections to include
- How to avoid common mistakes
- How to build one without a lawyer
🧾 Step 1: Define Your Business and Structure
Start with the basics:
- Business name and legal status
- Address and main office location
- Nature of the business
- Names of all partners
Make sure all parties review and agree before proceeding.
📊 Step 2: Ownership and Contributions
Clearly state:
- How much each partner is investing
- What form the investment takes (cash, IP, equipment, etc.)
- Ownership percentages
This helps ensure fairness and transparency.
📈 Step 3: Profits, Losses, and Payments
Your agreement should explain:
- How profits will be distributed
- Who handles finances
- How losses are shared
- If salaries or draws apply
⚖️ Step 4: Roles, Duties, and Decision-Making
Assign roles:
- Day-to-day responsibilities
- Signing authority and financial decisions
- Who can hire/fire staff
- Voting rights (equal or weighted?)
💢 Step 5: Resolving Disputes
Include a clause for handling conflict:
- Mediation or arbitration?
- What happens if partners deadlock?
- What law applies?
🔚 Step 6: Exit Terms and Dissolution
Plan ahead:
- What happens if a partner leaves?
- What if one dies or becomes disabled?
- How to dissolve the partnership?
This protects everyone’s interests.
🧠 Pro Tips for Better Agreements
- Use plain English — not legalese
- Get every partner to sign
- Keep a digital and physical copy
- Review your agreement yearly
🧰 Generate Yours the Easy Way
Use our Partnership Agreement Generator to fill in your details and instantly create a tailored, professional agreement.