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The Partnership Deed is a legal document that establishes a partnership between four parties (Party 1, Party 2, Party 3, and Party 4) for the purpose of conducting a business. The document begins with an interpretation section, defining various terms used throughout the deed. It also includes clauses and headings for convenience, which do not affect the construction of the deed. The deed specifies the commencement date and the business of the partnership, which should be conducted in the best interests of the partnership on sound commercial profit-making principles. The name of the partnership is also mentioned.
The deed outlines the capital contributions made by each partner and the percentage shares of the partners. It also covers further finance, stating that each partner is obligated to contribute their percentage share of all funding required by the budget or as agreed by the partnership board. The partners are not obliged to provide guarantees for the partnership's financing commitments, but if they do, the liabilities under such guarantees are several and not joint and several.
The deed addresses the allocation of profits and losses, stating that they will be determined from the partnership's accounts and allocated to the partners in proportion to their percentage shares. It also mentions the distribution of surplus cash to the partners. The partnership board, consisting of directors appointed by each partner, is responsible for the overall supervision of the business. The chief executive is responsible for day-to-day executive management, and other executive managers assist the chief executive.
The deed covers partnership property, stating that it is beneficially owned by the partners in proportion to their percentage shares. It also includes undertakings by the partners, such as not engaging in competing businesses and promoting the best interests of the partnership. The partners are responsible for reimbursing costs and expenses incurred in the performance of their obligations.
The deed includes provisions for accounts, budgets, and information. The auditors are responsible for auditing the partnership's accounts, and the chief executive is responsible for producing a draft budget and updating the business plan. The partners have access to information relating to the partnership's affairs.
Indemnities are provided by each partner to keep the other partner indemnified against any losses or liabilities arising from the non-performance of obligations or actions outside the scope of authority. The deed also addresses default, termination, confidentiality, announcements, notices, governing law, and dispute resolution.
In the event of termination, the partners consult and agree on an orderly programme for winding up the partnership's business and distributing its assets. The deed concludes with provisions for waivers and amendments, severability, entire deed, counterparts, and no rights for third parties.
1. Establish the partnership: Enter the names and addresses of the four parties involved in the partnership, along with their principal place of business. This will establish the identity of the parties and their intention to form a partnership.
2. Define the business: Clearly describe the nature of the business to be conducted by the partnership. This will help set the expectations and scope of work for all parties involved.
3. Determine capital contributions: Specify the initial capital contributions to be made by each partner. This will determine the percentage shares of the partners and their rights and obligations.
4. Agree on further finance: Determine the funding requirements for the partnership, including any additional funding beyond the initial contributions. Each partner should agree to contribute their percentage share of the required funding.
5. Allocate profits and losses: Determine how profits and losses will be allocated among the partners. This should be done in proportion to their percentage shares, unless otherwise agreed.
6. Establish the partnership board: Appoint directors to the partnership board, with each partner nominating directors. The partnership board will have overall supervision of the business and make decisions on behalf of the partnership.
7. Delegate executive management: Delegate day-to-day executive management of the business to the chief executive, who will be responsible for implementing the business plan and budget.
8. Manage partnership property: Clarify that partnership property is beneficially owned by the partners in proportion to their percentage shares. Any property held by a partner on behalf of the partnership should be held in trust.
9. Undertakings by partners: Ensure that each partner undertakes to promote the best interests of the partnership and act in good faith towards the other partners. This will help maintain a cooperative and productive partnership.
10. Reimburse expenses: Establish arrangements for reimbursing partners for costs and expenses incurred in the performance of their obligations. This will ensure that partners are fairly compensated for their contributions.
11. Maintain accounts and budgets: Specify the responsibilities for maintaining accounting records, preparing accounts, and producing budgets. This will help monitor the financial performance of the partnership and ensure transparency.
12. Provide indemnities: Include provisions for indemnifying partners against losses or liabilities arising from non-performance of obligations or actions outside the scope of authority. This will protect partners from potential legal and financial risks.
13. Address default and termination: Define events of default and the consequences, such as the right to sell a defaulting partner's interest. Establish procedures for terminating the partnership and winding up its business.
14. Ensure confidentiality: Include provisions for maintaining the confidentiality of commercial and technical information related to the partnership and the partners' affairs. This will protect sensitive information and prevent unauthorized disclosure.
15. Follow notice requirements: Adhere to the notice requirements for formal communications between the partners. This will ensure effective communication and timely resolution of any issues.
16. Comply with governing law: Acknowledge that the deed is governed by the laws of the relevant territory and submit to the jurisdiction of its courts. This will provide a legal framework for resolving disputes.
17. Seek amicable settlement: Encourage the parties to resolve any disputes amicably before resorting to formal dispute resolution mechanisms. This will promote cooperation and maintain a positive working relationship.
18. Execute counterparts: Sign and deliver the deed in multiple counterparts, with each party signing a separate counterpart. This will create a legally binding agreement between the parties.
19. No rights for third parties: Clarify that the deed does not confer any rights on third parties to enforce its terms. This will prevent any unintended legal obligations towards third parties.