Partnership agreements may range from relatively simple ones in a business start up situation to more complex ones for professional partnerships.
A written partnership agreement is essential for any partnership. In the absence of an agreement, the terms may be the default provisions of the Partnership Act 1890, or those which can be ascertained as having been agreed orally between the parties, implied by custom or industry usage or gathered from various meetings of the partners. A failure to put in place a properly drafted agreement is likely to have undesired results and leave the parties far from what was originally intended.
The process of agreeing the terms of a partnership will force into the open issues which may otherwise be forgotten or sidestepped. It also enables more sensitive issues such as exit from the partnership on retirement or expulsion to be dealt with when sensitivity may prevent such issues being dealt with later.
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