Partnerships
People starting up in partnership often ask whether it is really necessary to have a formal partnership agreement. The answer is definitely 'Yes'.
Basically, the agreement should set out the rules governing how the partnership operates, and should cover the main ´What happens if ...´ situations. If there is no agreement, there will be a large element of uncertainty, and applying the underlying law, such as the Partnership Act 1890, may well lead to unwanted results.
It is usually best to have a partnership agreement drawn up by a solicitor, but before you reach that stage you should think about exactly what you want the agreement to cover. In particular, you should consider:
1. Running the business
2. partners´ duties
3. working hours and holidays
4. decision-making procedures
5. business premises
6. cars
7. Financial matters
8. profit-sharing arrangements, and drawings on account
9. partnership capital (and interest arrangements)
10. banking and financial arrangements
11. accounting arrangements
12. making provision for tax payments
13. Special circumstances
14. partner retirement procedures
15. death of a partner
16. providing for partners' retirements and dependants
17. disability of a partner
18. establishing the right to expel a partner
19. arbitration for unresolved disputes