Why don’t you have a partnership agreement?
You may be one of many businesses that operates as a Partnership rather than a limited company. If there is no written agreement in place the default position on how the Partnership will operate is set out in the Partnership Act.
This Act provides, amongst other things, that the death or bankruptcy of a Partner automatically dissolves the partnership and that each partner’s share of the profits of the Partnership will be equal. These provisions can be varied by agreement between the Partners but without such agreement, you will have to rely on the Act, which can have unfortunate and unintended consequences.
To ensure that the rights and obligations of Partners are accurately set out it is therefore of the utmost importance that a Partnership Agreement be entered into. Preparing this at an early stage also helps to set out the intentions of the Partners and how they want their business to operate.
Advising on, and drafting, partnership agreements is something that we can help you with.
Tom Swindells [email protected] 01756 700200