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The Partnership Agreement is a legally binding document that establishes a partnership between Party 1 and Party 2. The agreement outlines the purpose of the partnership, which is to conduct business in a specific territory under the name of the partnership. It also regulates the relationship between the partners and the management of the partnership.
The agreement begins with an interpretation section that defines key terms used throughout the document. It includes definitions for accounting period, affiliate, accounts, auditors, budget, business day, business plan, director, effective date, executive manager, partners, partnership board, partnership interest, partnership, percentage share, p1's capital account, p2's capital account, clauses and headings, statutes, orders and regulations.
The agreement then covers various aspects of the partnership, including the commencement, business of the partnership, partnership capital, further finance, profits and losses, directors and partnership board, executive management, partnership property, undertakings by partners, expenses, accounts, budgets and information, indemnities, default, assignments, confidentiality and announcements, termination and deadlock, waivers and amendments, severability, entire agreement, notices, settlement of disputes, governing law, dispute resolution, counterparts, and no rights for third parties.
In the event of termination, the partners are required to consult and agree on an orderly program for winding up the business of the partnership and distributing its assets. The agreement also includes provisions for the preparation of final accounts and the distribution of profits and losses.
This Partnership Agreement is governed by the laws of the territory and any disputes between the parties are to be resolved through amicable settlement or through the courts of the territory.
To use this Partnership Agreement, follow these steps:
1. Review the entire agreement to understand its terms and provisions.
2. Ensure that both Party 1 and Party 2 agree to establish a partnership and regulate their relationship as partners.
3. Clearly define the purpose of the partnership and the territory in which it will operate.
4. Determine the initial contributions to the partnership capital by Party 1 and Party 2.
5. Agree on the percentage shares of the partners based on their capital contributions.
6. Discuss and agree on the funding requirements for the partnership, including any additional funding that may be required in the future.
7. Establish a process for allocating profits and losses among the partners.
8. Appoint directors to the partnership board, ensuring representation from both Party 1 and Party 2.
9. Delegate day-to-day executive management responsibilities to the chief executive, who will be assisted by other executive managers.
10. Determine the ownership of partnership property and the obligations of each partner in relation to the partnership's assets.
11. Agree on undertakings by the partners, including restrictions on engaging in competing businesses.
12. Establish procedures for reimbursement of expenses incurred by the partners in the performance of their obligations.
13. Ensure proper accounting records are maintained and audited by appointed auditors.
14. Prepare budgets and business plans for each accounting period, seeking approval from the partnership board.
15. Provide indemnities to protect each partner from losses or liabilities arising from breaches of the agreement.
16. Define events of default and the consequences for the defaulting partner.
17. Establish procedures for transferring partnership interests, including rights of first refusal for the other partner.
18. Maintain confidentiality of commercial and technical information related to the partnership.
19. Follow the agreed-upon procedures for termination of the partnership and the winding up of its business.
20. Comply with any applicable laws and regulations governing the partnership.
It is recommended to seek legal advice before entering into this Partnership Agreement to ensure compliance with local laws and regulations.