Partnership Agreements and Business Disputes

A partnership agreement cannot replace a company’s charter, but it can be an addition to it. Partnership agreements can also be made between individuals.

Partnership agreements are a kind of formalization of the relationship between business partners. All main points of the relationship must be recorded in writing.

Reasons for signing a partnership agreement:

– The partnership is planned to be long-term

– The presence of several partners from different categories, for example, several performers and a manager.

– Business partners already have joint property, or they want to purchase it.

The main purpose of such a partnership agreement is to calm emotions and appeal to the voice of reason of all business partners in case of disputes. The agreement will clearly indicate what the partners agreed on earlier, so no one will be able to declare that they forgot about their obligations, did not know about them or that they do not have such obligations to their partners at all. Thanks to this, it is possible to not bring the case to court, but to instead resolve all disputes through discussion by calling for the help of a lawyer who will help to understand and offer options for resolving the dispute.

The main points of the partnership agreement:

– Under what conditions is “entry” to the partnership carried out?

– Availability of common property

– Categories of partners

– The purpose of the partnership and its main principles

– Distribution of profits between partners

– Distribution of business costs between partners

– Who will be the managing partner

– Roles in partnership

– Duties of each of the partners

– What questions should be accepted only with the consent of all partners

– Ways and reasons to “exit” the partnership

During the coronavirus pandemic, more and more business disputes began to be resolved in a pre-trial format in the form of discussion in the presence of all partners and a lawyer. Moreover, this format can be carried out remotely via video call.

Despite this, there are still business disputes that cannot be resolved without bringing the case to court. In court, the partnership agreement will be one of the main documents and evidence, because it indicates what obligations partners have to each other.