Delaware partnership agreement template

Delaware Partnership Agreement

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

• [Partner 1 Name], residing at [Partner 1 Address], with contact information: [Partner 1 Contact Information];
• [Partner 2 Name], residing at [Partner 2 Address], with contact information: [Partner 2 Contact Information];
• [Partner 3 Name], residing at [Partner 3 Address], with contact information: [Partner 3 Contact Information];

(collectively, the “Partners”).

Formation of Partnership

• Option A: The Partners hereby form a [Partnership Type, e.g., General Partnership, Limited Partnership, Limited Liability Partnership] under the laws of the State of Delaware.
• Option B: The Partnership shall be known as [Partnership Name] and shall be governed by the Delaware Revised Uniform Partnership Act (DRUPA) or the Delaware Revised Uniform Limited Partnership Act (DRULPA), as applicable.

The principal office of the Partnership shall be located at [Partnership Address]. The registered agent and office in Delaware shall be [Registered Agent Name] at [Registered Agent Address].

Business Purpose

• Option A: The purpose of the Partnership is to engage in the business of [Description of Business Activities].
• Option B: The Partnership is authorized to conduct any lawful business, activity, or purpose under the laws of the State of Delaware.

The Partnership shall not engage in [Prohibited Business Activities].

Term

• Option A: The term of this Partnership shall commence on [Start Date] and shall continue perpetually unless sooner terminated as provided herein.
• Option B: The term of this Partnership shall commence on [Start Date] and shall continue for a term of [Number] years, expiring on [End Date].
• Option C: Automatic Renewal
  • The term shall automatically renew for successive [Number] year periods unless any Partner provides written notice of non-renewal at least [Number] days prior to the expiration of the then-current term.

Capital Contributions

• Each Partner shall contribute the following capital to the Partnership:
  • [Partner 1 Name]: [Contribution Amount/Description]
  • [Partner 2 Name]: [Contribution Amount/Description]
  • [Partner 3 Name]: [Contribution Amount/Description]
• Option A: Additional Capital Contributions
  • The Partners may be required to make additional capital contributions as determined by a [Majority/Supermajority/Unanimous] vote of the Partners.
• Option B: Consequences of Default
  • If a Partner fails to make a required capital contribution, the other Partners may [Consequences, e.g., loan the amount to the defaulting Partner, reduce the defaulting Partner's ownership interest, dilute ownership].

Ownership and Allocation of Profits and Losses

• The ownership interests of the Partners shall be as follows:
  • [Partner 1 Name]: [Percentage/Units/Shares]
  • [Partner 2 Name]: [Percentage/Units/Shares]
  • [Partner 3 Name]: [Percentage/Units/Shares]
• Option A: Profit and Loss Allocation
  • Profits and losses shall be allocated among the Partners in proportion to their respective ownership interests.
• Option B: Special Allocations
  • Notwithstanding the foregoing, [Specific Allocation Rules].

Distributions of available cash flow shall be made to the Partners [Frequency, e.g., quarterly, annually] in proportion to their respective ownership interests.

Management and Decision-Making

• Option A: Managing Partner(s)
  • The Managing Partner(s) of the Partnership shall be [Managing Partner Name(s)]. The Managing Partner(s) shall have the authority to [Scope of Authority].
• Option B: Voting Rights
  • Decisions of the Partnership shall be made by a [Majority/Supermajority/Unanimous] vote of the Partners.

Partner meetings shall be held [Frequency, e.g., monthly, quarterly, annually] at [Location]. Notice of meetings shall be given at least [Number] days prior to the meeting date.

Duties, Rights, and Obligations of Partners

Each Partner shall devote [Time Commitment, e.g., full-time, part-time] to the business of the Partnership.

• Option A: Non-Competition
  • During the term of this Agreement and for a period of [Number] years following the termination hereof, no Partner shall engage in any business that is competitive with the business of the Partnership within a radius of [Number] miles of the Partnership’s principal office.
• Option B: Confidentiality
  • Each Partner shall maintain the confidentiality of all confidential information of the Partnership.

Standard of Care: Each Partner shall act in good faith and exercise reasonable care in the performance of their duties. Subject to any waivers of fiduciary duties permitted under Delaware law and explicitly stated herein, Partners shall be subject to the default fiduciary duties as established under the DRUPA or DRULPA.

Admission and Withdrawal of Partners

• Option A: Admission of New Partners
  • New Partners may be admitted to the Partnership with the [Majority/Supermajority/Unanimous] consent of the existing Partners.
• Option B: Withdrawal of Existing Partners
  • A Partner may withdraw from the Partnership upon [Number] days written notice to the other Partners.

Valuation: Upon withdrawal, the withdrawing Partner shall be entitled to receive [Buyout Price Determination, e.g., fair market value, book value] for their interest in the Partnership.

Withdrawal, Retirement, Expulsion, and Death

• Events Triggering Buyout:
  • Voluntary Withdrawal
  • Involuntary Retirement
  • Expulsion
  • Death
• Buyout Price: The buyout price shall be determined by [Valuation Method, e.g., Appraisal, Formula].
• Payment Terms: The buyout price shall be paid in [Payment Terms].

Dissolution

• Events of Dissolution:
  • Agreement of the Partners
  • Sale of all or substantially all of the Partnership’s assets
  • Bankruptcy of the Partnership
  • Death or Incapacity of a Partner
  • Judicial decree

Winding Up: Upon dissolution, the assets of the Partnership shall be liquidated, and the proceeds shall be distributed in the following order: (1) to creditors, (2) to Partners in repayment of capital contributions, and (3) to Partners in proportion to their ownership interests.

Dispute Resolution

• Option A: Mediation
  • Any dispute arising out of or relating to this Agreement shall be resolved through mediation.
• Option B: Arbitration
  • Any dispute arising out of or relating to this Agreement shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association.

Choice of Law and Venue: This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. The venue for any legal action shall be [Venue].

Tax Treatment and Reporting

• The Partnership shall elect to be treated as a [Tax Treatment, e.g., partnership, S-corporation] for federal income tax purposes.
• The Tax Matters Partner (or Partnership Representative) shall be [Tax Matters Partner Name].
• Section 754 Election: The Partnership [Shall/Shall Not] make an election under Section 754 of the Internal Revenue Code.

Accounting

• The fiscal year of the Partnership shall end on [Date].
• The Partnership shall maintain its books and records in accordance with [Accounting Method, e.g., GAAP] using the [Cash/Accrual] method of accounting.

Each partner shall have access to the books and records.

Insurance

• Option A: Key Person Insurance
  • The Partnership shall maintain key person insurance on the lives of [Key Persons].
• Option B: Liability Insurance
  • The Partnership shall maintain liability insurance in an amount of [Amount].

Amendment

This Agreement may be amended only by a written instrument signed by [Majority/Supermajority/Unanimous] of the Partners.

Indemnification

The Partnership shall indemnify and hold harmless each Partner from and against any and all losses, claims, damages, liabilities, and expenses arising out of or relating to the Partner’s activities on behalf of the Partnership. Delaware law regarding indemnification shall apply.

Compliance and General Provisions

• Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• Entire Agreement: This Agreement constitutes the entire agreement between the Partners with respect to the subject matter hereof and supersedes all prior or contemporaneous communications and proposals, whether oral or written.
• Counterparts: 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.
• Electronic Signatures: Electronic signatures shall be accepted as original signatures.
• Notices: All notices hereunder shall be in writing and shall be deemed to have been duly given when delivered personally, sent by certified mail, return receipt requested, or sent by email to the addresses set forth above.
• Delaware-Specific Provisions: This agreement is specifically intended to comply with and take advantage of the flexibility afforded by Delaware law, including the DRUPA and DRULPA where applicable. Waivers of fiduciary duties permitted under Delaware law are expressly intended to be enforceable to the maximum extent permitted by law.
• Series Partnerships (if applicable): If this partnership is a series partnership under Delaware law, the following provisions apply: [Series Partnership Provisions].
• Annual Report and Franchise Tax: The Partnership is responsible for complying with Delaware's annual report and franchise tax obligations.

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]