Getting Started - Legal Structure
Articles Often Found in Partnership Agreements

Articles Often Found in Partnership Agreements

• Name
• Purpose
• Domicile
• Duration of agreement
• Character of partners: general, limited, active, or silent
• Contributions by partners: at inception, at a later date
• Business expenses
• Authority
• Separate debts
• Books, records, and method of accounting
• Division of profits and losses
• Draws or salaries
• Rights of continuing partner
• Death of a partner; dissolution and winding up
• Employee management
• Release of debts
• Sale of partnership interest
• Arbitration
• Modifications of partnership agreement
• Settlements of disputes
• Required and prohibited acts
• Absence and disability

Are there specific types of partnerships?
Yes. This is especially true if the partners are unequal in some way. Examples are:

• Ostensible partner
Active and known as a partner

• Active partner
May or may not be ostensible as well

• Secret partner
Active, but not known or held out as a partner

• Dormant partner
Inactive and not known or held out as a partner

• Silent partner
Inactive, but may be known as a partner

• Nominal partner
Not a true partner, but can be represented in name or by some other representation

• Subpartner
Not a member of the partnership, but contracts with a partner to participate in the interest of such partner in the firm’s business and profits

• Limited partner
Assuming compliance with the statutory formalities, the limited partner risks only his or her agreed investment in the business