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Estate Planning - Partnership Agreement

In order to have complete peace of mind when it comes to business relationships, it is wise to

draw up a partnership agreement. This can - and ideally should - be done when the company is

created, and all partners need to be included within the terms, and sign the document to prove

that they agree to contingency plans laid out within the agreement.

It is all part of responsible and intelligent estate planning (ie making sure that not only do you

have a will, but that your entire estate - which includes all business interests - are in a state that is

easy to manage and simple to deal with during probate.

A partnership agreement will set out exactly what each partner does, what they bring to the

business, their individual and collective duties, their share percentages, how much money they

have invested, and what would happen should one of the partners die, become incapacitated, or

simply choose to leave the company.

The partnership agreement will ensure that the business can continue, even if the worst should

happen - it is a legal document that will be used to ascertain the company's assets and standing

should it be required by creditors.

The partnership agreement is not required by law, and is in fact a voluntary agreement between

partners, but, although not everyone creates one, that doesn't mean that it is a good idea to ignore

that your business could benefit from one. Imagine if one of the partners was no longer around,

for whatever reason. What would happen to the employees? What would happen to those relying

on the business, such as customers and clients? And what would happen to you?

Although it is possible to find templates for writing your own partnership agreement online

(although the other partner(s) must be aware of the document, and must agree to what it says),

and although these are perfectly valid, it is always worth checking with a professional to ensure

that everything is exactly as it should be. One wrong word there, an inaccurate figure there, and

the agreement could be scrapped, leaving the business partners in confusion, and the business

itself in jeopardy.

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0800 612 6105 or 020 8150 2010