Partnership agreements are contracts that dictate the terms and conditions of a partnership between two or more individuals or entities. They outline the roles, responsibilities, and obligations of each partner, as well as the terms of how the partnership will operate. However, there are certain aspects of partnership agreements that are not typically included, as outlined below.
Partnership agreements generally specify the following:
1. Partnership structure: The partnership structure outlines how the partnership will be organized and who will be responsible for what. This includes the roles of the partners, such as the managing partner or the limited partner, as well as the decision-making process.
2. Capital contributions: The partnership agreement outlines the amount of money or assets each partner will contribute to the partnership, as well as the terms of how the contributions will be made, such as in cash, property, or services.
3. Profit and loss allocation: The partnership agreement specifies how the profits and losses of the partnership will be divided among the partners. This includes the percentage of ownership each partner has in the partnership, as well as the distribution of profits and losses according to the partnership structure.
4. Partnership dissolution: The partnership agreement outlines the terms of how the partnership will be dissolved, including the circumstances under which the partnership will be terminated, the distribution of assets and liabilities, and the process of winding up the partnership.
However, there are certain aspects of partnership agreements that are not typically included, such as:
1. Partner salaries: While partnerships may agree to pay partners for their services, the partnership agreement does not typically specify the salaries or compensation of partners.
2. Non-compete clauses: Partnership agreements generally do not include non-compete clauses, which would restrict partners from engaging in similar business activities outside of the partnership.
3. Employee agreements: Partnership agreements do not typically address the terms of employee agreements, such as job descriptions, salaries, and benefits.
4. Intellectual property: While partnerships may agree to share intellectual property, partnership agreements generally do not detail the terms of how intellectual property will be owned or managed.
In conclusion, partnership agreements are essential documents that outline the terms of a partnership, including the roles and responsibilities of each partner, capital contributions, profit and loss allocation, and partnership dissolution. While they cover a wide range of topics, they do not typically include partner salaries, non-compete clauses, employee agreements, or intellectual property ownership. As such, it is important for partnerships to consider these aspects and include them in separate agreements, as necessary.