Frequently Asked Questions

What are the different aspects to consider while drafting a business partnership agreement?

When drafting a business partnership agreement, there are several aspects to consider. Firstly, the type of partnership should be defined. This could be a general partnership, where all partners are liable for the obligations and debts of the business, a limited partnership, which includes a general partner with unlimited liability and a limited partner with liability only for their portion of ownership, or a limited liability partnership, where each partner is only liable for their own actions. The agreement should clearly define the nature of the relationship between the partners, as well as the responsibilities and expectations of each party. This includes detailing all compensation structures and timelines, agreement termination procedures, and terms of engagement. It should also specify the authority of each partner and define instances when a partner needs to consult with the others before taking action. The agreement should also outline the responsibilities of the organization, including any sales support services provided, such as product samples or sales literature. It should also detail the responsibilities and expectations of the sales partner, including expected sales goals, unreimbursed expenses, customer qualifications, charging policies, and services rendered. The compensation plan should outline all revenue sharing, commission, payment remittance timelines, and fee arrangements.