What is a partnership agreement?

A partnership agreement is a contract between two or more people who are running a business together. It sets out each partner's ownership, roles, how profits are shared, and what happens if someone leaves.

Do I need a partnership agreement if I trust my partner?

Yes. Even with full trust, a written agreement prevents misunderstandings and protects both partners if circumstances change — such as one partner wanting to leave or disagreements over money.

What is a 50/50 partnership agreement?

It is an agreement where two partners share ownership, profits, losses, and decisions equally. It should also include a clear process for resolving disagreements, since neither partner has a majority vote.

What is a limited partnership?

A limited partnership has two types of partners: a general partner who manages the business and takes on liability, and a limited partner who invests money but does not run the business and has limited personal risk.

How are profits shared in a partnership?

The partnership agreement sets out the split. It can be equal or based on each partner's contribution — for example, 60/40 if one partner invested more money or does more work.

What happens if a partner wants to leave?

The agreement should include a buyout process — explaining how the departing partner's share is valued and paid out to them, and who takes on their responsibilities.

What is a deadlock provision in a 50/50 partnership?

A deadlock provision sets out what happens when both partners disagree and cannot reach a decision. Options include bringing in a mediator, giving one partner a casting vote, or triggering a buyout.

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