Alabama partnership agreement template

Alabama Partnership Agreement

This Partnership Agreement (the “Agreement”) is made and entered into as of [Date], by and among:

• [Partner 1 Name], residing at [Partner 1 Address], a citizen of [Partner 1 Citizenship] (hereinafter “Partner 1”);
• [Partner 2 Name], residing at [Partner 2 Address], a citizen of [Partner 2 Citizenship] (hereinafter “Partner 2”); and
• [Partner 3 Name], residing at [Partner 3 Address], a citizen of [Partner 3 Citizenship] (hereinafter “Partner 3”).

1. Formation of Partnership

• Option A: General Partnership
• Option B: Limited Partnership (requires filing with the Alabama Secretary of State)
• Option C: Limited Liability Partnership (requires compliance with Alabama Code § 10A-8A-1001)

The parties hereby form a [Partnership Type, e.g., General Partnership] under the laws of the State of Alabama. The name of the Partnership shall be [Partnership Name], and its principal place of business shall be located at [Partnership Address].

The Partnership shall commence on [Start Date] and shall continue [Duration of Partnership: Fixed Term or Perpetual]. If fixed-term, the Partnership shall terminate on [End Date].

The purpose of the Partnership is to engage in the following business activities: [Description of Business Activities].

2. Capital Contributions

Each Partner shall contribute to the capital of the Partnership as follows:

• [Partner 1 Name]: [Partner 1 Contribution Amount] in cash, [Description of Property Contribution, if any] valued at [Property Valuation Amount], [Description of Services Contribution, if any] valued at [Services Valuation Amount].
• [Partner 2 Name]: [Partner 2 Contribution Amount] in cash, [Description of Property Contribution, if any] valued at [Property Valuation Amount], [Description of Services Contribution, if any] valued at [Services Valuation Amount].
• [Partner 3 Name]: [Partner 3 Contribution Amount] in cash, [Description of Property Contribution, if any] valued at [Property Valuation Amount], [Description of Services Contribution, if any] valued at [Services Valuation Amount].

All capital contributions shall be made on or before [Contribution Deadline].

• Option A: Additional Capital Contributions Required
• Option B: Additional Capital Contributions Not Required

If additional capital contributions are required, the procedure for making such contributions shall be as follows: [Procedure for Additional Capital Contributions]. Failure to make required capital contributions shall result in the following penalties: [Penalties for Failure to Contribute].

3. Percentage Interests and Allocation of Profits and Losses

The percentage interests of each Partner in the Partnership are as follows:

• [Partner 1 Name]: [Partner 1 Percentage Interest]%
• [Partner 2 Name]: [Partner 2 Percentage Interest]%
• [Partner 3 Name]: [Partner 3 Percentage Interest]%

Profits and losses shall be allocated among the Partners in proportion to their respective percentage interests.

• Option A: Pro Rata Allocation
• Option B: Waterfall Allocation (specify details): [Waterfall Allocation Details]
• Option C: Customized Allocation (specify details): [Customized Allocation Details]

Distributions shall be made to the Partners [Distribution Frequency, e.g., quarterly] in the form of [Form of Distribution, e.g., cash].

4. Management and Decision-Making

• Option A: All Partners Manage
• Option B: Single Managing Partner: [Managing Partner Name]
• Option C: Management Committee: [Management Committee Members]

Daily management of the Partnership shall be the responsibility of [Responsible Party/Parties].

Major decisions, including but not limited to the admission of new partners, withdrawal of existing partners, mergers, amendment of this Agreement, major asset sales, and dissolution of the Partnership, shall require the approval of [Required Approval Percentage, e.g., a majority] of the Partners. Meetings shall be held [Meeting Frequency] and voting shall be conducted as follows: [Voting Procedure].

5. Duties and Obligations of Partners

Each Partner shall act in good faith and with loyalty to the Partnership. Each Partner shall devote [Time Commitment, e.g., their full time and attention] to the business of the Partnership.

• Option A: Exclusive Business Engagement
• Option B: Non-Exclusive Business Engagement (disclosure required): [Procedure for Disclosure of Outside Opportunities]

Conflicts of interest shall be governed by [Conflict of Interest Policy, reference to Alabama RUPA if applicable].

6. Transfer and Assignment of Partnership Interests

No Partner may transfer or assign their partnership interest without the prior written consent of [Required Approval Percentage, e.g., all] of the other Partners.

• Option A: Right of First Refusal
• Option B: Tag-Along Rights
• Option C: Drag-Along Rights

Any permitted transfer shall be subject to the following conditions: [Conditions for Transfer].

7. Admission of New Partners

New partners may be admitted to the Partnership upon the approval of [Required Approval Percentage, e.g., unanimous] of the existing Partners. The buy-in requirements for new partners shall be as follows: [Buy-In Requirements].

The allocation of interests, rights, and duties of any new partner shall be determined by [Method of Determining New Partner Interests].

8. Withdrawal of a Partner

A Partner may withdraw from the Partnership upon [Notice Period] written notice to the other Partners.

• Events triggering involuntary withdrawal: [Events Triggering Involuntary Withdrawal, e.g., death, disability, bankruptcy]
• Expulsion of a partner: [Conditions for Expulsion]

The settlement or buyout formula for a withdrawing Partner shall be as follows: [Buyout Formula and Payment Schedule].

9. Dissolution and Winding Up

The Partnership may be dissolved [Events Triggering Dissolution, e.g., upon the agreement of all Partners, or the occurrence of a specific event].

Upon dissolution, the assets of the Partnership shall be distributed in the following order:

1. To creditors of the Partnership (including Partner loans).
2. To Partners for repayment of capital contributions.
3. The balance, if any, to the Partners in proportion to their percentage interests.

The liquidator shall have the authority to [Authority of Liquidator].

10. Partner Compensation

• Option A: No Salary
• Option B: Salary: [Partner Name] shall receive a salary of [Salary Amount] per [Salary Frequency].
• Option C: Guaranteed Payments: [Partner Name] shall receive guaranteed payments of [Guaranteed Payment Amount] per [Guaranteed Payment Frequency].

Reimbursement for expenses incurred on behalf of the Partnership shall be made upon submission of appropriate documentation.

11. Tax Matters

The Partnership shall file its tax returns as a [Partnership Tax Filing Method]. The fiscal year of the Partnership shall be [Fiscal Year].

The Tax Matters Partner (or Partnership Representative) shall be [Tax Matters Partner Name].

12. Books and Records

The Partnership shall maintain accurate books and records at its principal place of business. All Partners shall have access to the books and records.

Annual financial statements shall be prepared in accordance with [Accounting Method, e.g., GAAP].

• Option A: Annual Audit Required
• Option B: Annual Audit Not Required

13. Banking Arrangements

The Partnership shall maintain bank accounts at [Bank Name].

[Authorized Person/People] are authorized to open and operate the Partnership's bank accounts. All checks and other withdrawals shall require the signature of [Required Signatures].

14. Indemnification and Liability Limitation

The Partnership shall indemnify and hold harmless each Partner from and against any and all claims, losses, damages, liabilities, costs, and expenses arising out of or relating to the Partner's activities on behalf of the Partnership, except in cases of gross negligence, willful misconduct, or unlawful behavior. This is subject to the limits of applicable Alabama law.

15. Insurance

The Partnership shall maintain the following insurance coverage:

• General liability insurance: [Coverage Amount]
• Property insurance: [Coverage Amount]
• Key man life insurance (if applicable): [Coverage Amount], on [Insured Partner Name]

[Responsible Party] shall be responsible for maintaining the required insurance coverage.

16. Confidentiality

Each Partner shall maintain the confidentiality of all Partnership information and customer data during the term of this Agreement and for [Confidentiality Period] thereafter.

17. Non-Compete and Non-Solicitation

Each Partner agrees not to compete with the Partnership or solicit its customers or employees during the term of this Agreement and for [Non-Compete Period] following termination. The restricted area shall be [Geographic Area]. This clause is intended to be enforceable under Alabama law.

• Option A: Non-Compete Included
• Option B: Non-Compete Excluded

18. Dispute Resolution

Any dispute arising out of or relating to this Agreement shall be resolved through [Dispute Resolution Method, e.g., mediation followed by binding arbitration]. The governing law shall be the law of the State of Alabama. The venue for any legal action shall be [Venue, e.g., Montgomery County, Alabama]. Each party waives the right to a jury trial.

19. Amendment

This Agreement may be amended only by a written instrument signed by [Required Approval Percentage, e.g., all] of the Partners.

20. Notices

All notices required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or sent by certified mail, return receipt requested, to the addresses set forth above.

21. Miscellaneous

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous communications and proposals, whether oral or written. This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama, including the Alabama Uniform Partnership Act (AUPA). If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors, and assigns. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

If the partnership intends to conduct business under a name other than the partners' names, the partners are responsible for complying with Alabama's assumed name statute.

• Option A: Electronic Signatures Permitted.
• Option B: Electronic Signatures Prohibited.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

[Partner 1 Signature]

[Partner 1 Printed Name]

[Partner 2 Signature]

[Partner 2 Printed Name]

[Partner 3 Signature]

[Partner 3 Printed Name]