Arkansas partnership agreement template

Arkansas Partnership Agreement

This Partnership Agreement is made as of this [Date], by and between:

• [Partner 1 Name], residing at [Partner 1 Address]
• [Partner 2 Name], residing at [Partner 2 Address]
• [Partner 3 Name], residing at [Partner 3 Address] (if applicable)

1. Formation of Partnership

• The parties hereby form a partnership under the laws of the State of Arkansas.
• Partnership Type:
  • Option A: General Partnership
  • Option B: Limited Partnership (LP) - requires compliance with Arkansas Revised Uniform Limited Partnership Act.
  • Option C: Limited Liability Partnership (LLP) - requires registration with the Arkansas Secretary of State.

2. Name and Place of Business

• The business of the Partnership shall be conducted under the name of [Partnership Name].
• Principal Place of Business: [Partnership Address]

3. Purpose

• The purpose of the Partnership is:
  • Option A: To engage in any lawful business or activity under Arkansas law.
  • Option B: To [Specific description of business purpose].

4. Term

• The Partnership shall commence on [Effective Date].
• Duration:
  • Option A: At-will.
  • Option B: For a term of [Number] years, expiring on [Expiration Date].
• Dissolution Events:
  • Option A: Upon the occurrence of any event specified in the Arkansas Uniform Partnership Act.
  • Option B: Upon the written agreement of partners holding [Percentage]% or more of the partnership interests.
• Renewal:
  • Option A: Automatic Renewal for subsequent terms of [number] years unless either party provides notice.
  • Option B: No Automatic Renewal.

5. Capital Contributions

• Initial Contributions:
  • [Partner 1 Name] shall contribute [Cash Amount] in cash and/or [Description of Property] valued at [Valuation Amount].
  • [Partner 2 Name] shall contribute [Cash Amount] in cash and/or [Description of Property] valued at [Valuation Amount].
• Valuation:
  • Option A: The agreed-upon value is binding on all partners.
  • Option B: Valuation determined by [Method of Valuation].
• Future Contributions:
  • Option A: No future capital contributions are required.
  • Option B: Additional contributions may be required upon a vote of partners holding [Percentage]% or more of the partnership interests.
• Failure to Contribute:
  • Option A: Dilution of partnership interest proportionate to the shortfall.
  • Option B: Loan to the partnership at an interest rate of [Interest Rate]%.

6. Ownership Interests, Profits, and Losses

• Ownership Interests:
  • [Partner 1 Name]: [Percentage]%
  • [Partner 2 Name]: [Percentage]%
• Allocation of Profits and Losses:
  • Option A: Profits and losses shall be allocated in proportion to ownership interests.
  • Option B: Profits and losses shall be allocated as follows:
    • [Partner 1 Name]: [Percentage]%
    • [Partner 2 Name]: [Percentage]%
• Adjustments:
  • Option A: Ownership and Profit/Loss allocation will remain fixed.
  • Option B: May be adjusted by unanimous consent of all partners.
• Voting Rights:
  • Each partner shall have voting rights in proportion to their ownership interest.

7. Management and Decision-Making

• Management Structure:
  • Option A: Joint Management - All partners participate in management decisions.
  • Option B: Managing Partner - [Partner Name] shall serve as the managing partner and have the authority to [Scope of Authority].
• Decision Making:
  • Option A: Ordinary business decisions shall be made by a majority vote of the partners.
  • Option B: Major decisions (e.g., incurring debt over [Dollar Amount], selling assets over [Dollar Amount], admitting new partners) require unanimous consent.
• Authority to Bind:
  • Option A: All partners have authority to bind the partnership.
  • Option B: Only the Managing Partner [Partner Name] has authority to bind the partnership.

8. Partner Responsibilities and Duties

• Each partner shall:
  • Devote reasonable time and attention to the business of the Partnership.
  • Act in good faith and with loyalty to the Partnership.
  • Attend partner meetings as reasonably requested.
  • Refrain from competing with the business of the Partnership.
• Division of Labor:
  • [Partner 1 Name] responsible for: [List of Responsibilities]
  • [Partner 2 Name] responsible for: [List of Responsibilities]

9. Partner Compensation

• Distributions: Profits shall be distributed to the partners [Frequency].
• Guaranteed Payments: [Partner Name] shall receive a guaranteed payment of [Dollar Amount] per [Time Period].
• Expense Reimbursements: Partners shall be reimbursed for reasonable expenses incurred in connection with Partnership business.
• Tax Distributions:
  • Option A: Distributions will be made to cover estimated tax obligations.
  • Option B: No special tax distribution policies.

10. Banking

• The Partnership shall maintain a bank account at [Bank Name].
• Authorization: All withdrawals shall require the signature of [Partner Name(s)].
• Partnership Records and Accounting:
  • Option A: The partnership shall use accrual accounting.
  • Option B: The partnership shall use cash accounting.
• Fiscal Year: The partnership’s fiscal year shall end on [Date].

11. Tax Treatment and Reporting

• Each partner shall be responsible for their own individual tax obligations.
• Tax Matters Partner: [Partner Name] is designated as the Tax Matters Partner.
• The partnership will elect [Tax Election, e.g., under IRC Subchapter K].

12. Admission of New Partners

• New partners may be admitted with the consent of partners holding [Percentage]% of the partnership interests.
• Capital requirements for new partners will be determined at time of admission.

13. Withdrawal, Retirement, Death, Disability, or Expulsion of Partners

• Withdrawal: A partner may withdraw upon [Number] days written notice.
• Valuation of Departing Partner's Interest:
  • Option A: Book value.
  • Option B: Fair market value as determined by [Method of Valuation].
• Payment Terms:
  • Option A: Payment in a lump sum within [Number] days.
  • Option B: Payment in installments over [Number] months/years.
• Expulsion: A partner may be expelled for cause by a vote of partners holding [Percentage]% of the partnership interests.

14. Transfer or Assignment of Partnership Interests

• Restrictions: No partner may transfer or assign their partnership interest without the prior written consent of the other partners.
• Right of First Refusal: The other partners shall have a right of first refusal to purchase the transferring partner's interest.

15. Dissolution and Winding Up

• Dissolution Events: The Partnership shall dissolve upon [Event, e.g., death of a partner, agreement of all partners].
• Winding Up:
  • Winding Up will be performed by: [Partner Name or Names].
  • Distribution of assets after payment of debts will be proportional to ownership interests.

16. Dispute Resolution

• Negotiation: The parties agree to first attempt to resolve any disputes through good-faith negotiation.
• Mediation: If negotiation fails, the parties agree to submit to mediation in [City, State].
• Arbitration: Any unresolved disputes shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association, in [City, State].
• Governing Law and Jurisdiction: This Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas. Jurisdiction and venue shall be in [County] County, Arkansas.

17. Indemnification and Liability

• To the extent permitted by Arkansas law, the Partnership shall indemnify its partners against losses arising from their activities on behalf of the Partnership.
• Limitation of Liability: Partners shall not be personally liable for the debts and obligations of the Partnership, except to the extent required by Arkansas law for general partnerships.

18. Insurance

• The Partnership shall maintain [Type of Insurance, e.g., general liability insurance].
• Key Person Insurance:
  • Option A: The Partnership shall maintain a key person insurance policy on the life of [Partner Name].
  • Option B: No key person insurance will be required.

19. Boilerplate Provisions

• Notices: All notices shall be in writing and delivered to the addresses set forth above.
• Entire Agreement: This Agreement constitutes the entire agreement between the parties.
• Amendments: This Agreement may be amended only by a written instrument signed by all partners.
• Severability: If any provision of this Agreement is held to be invalid, the remaining provisions shall remain in full force and effect.
• Waiver: No waiver of any provision of this Agreement shall be effective unless in writing.
• Counterparts: This Agreement may be executed in counterparts.
• Assignment: This agreement is not assignable.
• Successor Binding: This agreement is binding on successors.

20. Arkansas Specific Provisions

• Arkansas Uniform Partnership Act: This Agreement is governed by the Arkansas Uniform Partnership Act.
• Filing Requirements (If LLP or LP): The Partnership shall comply with all filing requirements with the Arkansas Secretary of State.
• Arkansas Business Licenses: The Partnership shall obtain all necessary business licenses and permits required by Arkansas law.
• Arkansas Real Estate Ownership: In accordance with Arkansas Law, any real property owned by the partnership will be held by the partnership entity itself, not the individual partners.

21. Confidentiality (Optional)

• Each partner agrees to maintain the confidentiality of the Partnership's confidential information.

22. Non-Competition (Optional)

• Each partner agrees not to compete with the business of the Partnership during the term of this Agreement and for a period of [Number] years thereafter, within a [Radius] mile radius of [City, State].

23. Non-Solicitation (Optional)

• Each partner agrees not to solicit the Partnership's employees or customers during the term of this Agreement and for a period of [Number] years thereafter.

24. Miscellaneous

• Electronic Signatures: Electronic signatures shall be accepted as original signatures.

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

[Partner 1 Name]

[Partner 2 Name]

[Partner 3 Name] (if applicable)