Partnership Agreement FAQ

A partnership agreement is a contract between two or more individuals or entities who agree to run a business together. It defines profit/loss sharing, roles, decision-making authority, capital contributions, and procedures for adding or removing partners and dissolving the partnership.

Yes. Without one, your partnership is governed by default state law (the Uniform Partnership Act in most US states), which may not match your intentions. Default rules include equal profit sharing regardless of contribution, which is often not what partners intend.

General Partnership (GP): all partners share management and liability equally. Limited Partnership (LP): general partners manage and have unlimited liability; limited partners invest but do not manage and have limited liability. Limited Liability Partnership (LLP): all partners have limited liability.