Partnership Agreements

People working together in partnership are often unaware of the implications of not having a partnership agreement, or of having one that is no longer valid.  Without a current agreement, the partnership will be a “partnership at will” and subject to statutory provisions which may well not reflect the wishes of the majority of the partners.  For example, many practices are unaware that any partner can dissolve a partnership at will with immediate effect.  Similarly, if any partner retires from a partnership at will or dies, this also has the effect of dissolving the partnership as a whole.

A well-drafted and up-to-date partnership agreement which defines the rights and responsibilities of partners is one of the main safeguards against disputes about profit shares, property ownership, entitlement to leave and so on.  It is always easier to resolve these terms in advance rather than when a disagreement has already arisen.

Once a partnership agreement has been prepared and executed, it is essential to keep it up-to-date to ensure that its provisions remain in force. If a new partner joins the partnership, a partnership at will arises unless specific steps are taken to ensure the completion of a new partnership agreement or the recognition of prior terms by all concerned.

You will also need to vary the partnership agreement if new terms are agreed between the partners.

Our Partnership Team is excellently qualified to assist with:  

• Partnership agreements
• Deeds of variation
• Deeds of accession and retirement
• Advice on how to avoid a partnership of will arising