Before partners commit money or work, define what they are building together and how decisions, property, income and losses will be handled. A partnership agreement should also explain how the arrangement ends. It must fit the real structure: an agreement for joint activity is not interchangeable with an LLC charter or a shareholders’ agreement.
Choose the arrangement before the document
Article 930 of the Civil Code describes a partnership pursuing common objectives without creating a legal person. If the parties instead own shares in a company, company documents and the relevant company-law framework need separate treatment. The heading on a template does not settle the structure.
Describe the project, participants, customers, accounts and ownership of assets. Clarify who contracts with outsiders and whose name appears on invoices. A short transaction map often reveals problems that a generic agreement misses.
Define contributions and ownership
Record each contribution, its timing and how the parties value it. Money, equipment, work, software and access to premises are different contributions; each needs a clear description. Distinguish ownership transferred to the project from a limited right to use an asset.
- Amount, asset or work promised by each participant
- Delivery dates and evidence of performance
- Responsibility for additional funding and overruns
- Ownership and permitted use of intellectual property
- Access to accounts, books, customer records and project files
Agree who may decide and spend
Specify routine decisions, matters requiring joint approval, spending limits and who may sign a contract. Test the rules against practical situations: hiring a supplier, granting a discount, borrowing money or changing the project’s direction.
Arrange reporting and access to records before there is a disagreement. A decision log and agreed budget can reduce uncertainty about whether a partner acted with authority.
Separate revenue from distributable profit
Agree how costs are approved, when accounts are prepared, how reserves are handled and when a distribution can be considered. Cash in an account is not necessarily profit available to divide. Tax and accounting treatment should be checked for the actual arrangement.
Set out the handling of losses, unpaid customer invoices and obligations continuing after a partner leaves. Do not rely on a verbal understanding that everyone shares everything equally if the intended economics are different.
Plan disagreement, withdrawal and closure
Discuss withdrawal, breach, incapacity, death, deadlock and project completion. An exit mechanism should cover notice, valuation, unfinished work, outstanding liabilities, access credentials and the return or transfer of assets.
Agree a realistic dispute procedure and document-preservation process. A settlement about money alone can leave ownership, customer communication or continuing obligations unresolved.
What to bring for drafting or review
Prepare the project outline, participant details, contribution list, draft budget, existing agreements and any company or asset records. Identify what has already been promised orally and what remains undecided. This lets the review focus on the actual deal rather than inventing assumptions.
- Project purpose, milestones and proposed duration
- Contributions, assets and intellectual-property records
- Decision-making and signing arrangements
- Revenue, cost and distribution model
- Exit expectations and existing disagreements
Common questions
Is a partnership agreement the same as a shareholders’ agreement?
No. First determine whether the arrangement involves joint activity without a new legal person or ownership of a company. The documents should match that structure.
What if the partners have already started work?
Document contributions, payments, decisions and promises made so far. A new agreement should state how existing assets, obligations and disagreements are treated.
Can a partner leave without resolving outstanding commitments?
Do not assume so. Review the agreement, applicable rules and contracts with third parties before agreeing an exit or distributing assets.
Official source
Check the applicable current text and any special rules for the transaction.
This guide provides general preparation information. The correct documents, formalities and next step depend on the facts and applicable law.