Example Partnership Operating Agreement

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When two or more individuals decide to start a business, one of the first things they need to do is create a partnership operating agreement. This document outlines the roles and responsibilities of each partner and sets forth rules and guidelines for the partnership. A well-written partnership operating agreement can help avoid misunderstandings and conflicts between partners, and it can also protect the partners` interests if unforeseen circumstances arise.

Here is an example partnership operating agreement that can serve as a guide when creating your own:

1. Purpose: This section should state the purpose of the partnership and what it aims to achieve.

2. Identification of Partners: The names and addresses of all partners should be included, along with the percentage of the partnership that each owns.

3. Management: This section outlines how the partnership will be managed, who will make decisions, and how voting power will be distributed.

4. Capital Contributions: This section outlines how much each partner will contribute to the partnership, whether in the form of cash, property, or services.

5. Profits and Losses: This section describes how profits and losses will be allocated among the partners.

6. Salaries and Drawings: This section outlines the salaries and/or drawings that partners may take from the partnership. It may also outline how much each partner is allowed to withdraw from the partnership`s funds.

7. Accounting Records and Reports: This section outlines how accounting records will be kept and how often reports will be given to the partners.

8. Dissolution: This section outlines what will happen if the partnership is dissolved. It may include details such as how assets will be distributed and what will happen to any outstanding debts or obligations.

9. Dispute Resolution: This section outlines how disputes between partners will be resolved, whether through mediation, arbitration, or in court.

10. Amendments: This section outlines how the partnership operating agreement can be amended or changed.

It is important to note that this example partnership operating agreement is just that – an example. Your own partnership operating agreement will need to be tailored to your specific partnership and its needs. You may want to consult with a lawyer or accountant to ensure that your agreement meets all legal requirements and that it protects your interests.

In conclusion, a well-crafted partnership operating agreement can help ensure that your partnership runs smoothly and that all partners are on the same page. By including important details such as management, capital contributions, and dispute resolution, you can help avoid misunderstandings and conflicts. Use this example partnership operating agreement as a guide when creating your own, and don`t hesitate to seek professional assistance if needed.

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