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This Partnership Agreement (the "Agreement") is made and entered into as of this [Date] (the "Effective Date"), by and between:
[Your Full Legal Name]
[Your Full Address]
[Your Email Address]
[Your Phone Number]
(hereinafter referred to as "[Your Chosen Short Name or Initial]")
and
[Partner's Full Legal Name]
[Partner's Full Address]
[Partner's Email Address]
[Partner's Phone Number]
(hereinafter referred to as "[Partner's Chosen Short Name or Initial]")
(Collectively referred to as the "Partners" and individually as a "Partner").
WHEREAS, the Partners desire to associate themselves as partners in business for the purposes and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:
The Partners hereby form a general partnership (the "Partnership") pursuant to the laws of the State of California. The name of the Partnership shall be "Pixel & Paper". The Partnership may also conduct business under other names if and to the extent permitted by applicable law, provided the Partners mutually agree in writing.
The principal office and place of business of the Partnership shall be located at [Street Address, City, State, Zip Code], or such other place or places as the Partners may from time to time mutually determine.
The exclusive purpose of the Partnership is to engage in the business of design consulting, including but not limited to [List specific services like: graphic design, web design, branding strategy, UX/UI consulting, print design], and to engage in any and all other activities as may be necessary, incidental, or conducive to the attainment of these objectives, as mutually agreed upon by the Partners.
This Partnership shall commence on the Effective Date and shall continue until it is terminated by mutual written agreement of all Partners, or as otherwise provided in this Agreement (e.g., upon the death, bankruptcy, or withdrawal of a Partner, subject to the buyout provisions herein).
Each Partner shall contribute an initial sum of Five Thousand Dollars ($5,000.00) in cash to the capital of the Partnership on or before [Date, e.g., ten (10) days from the Effective Date]. These contributions shall be credited to each Partner's respective capital account.
If, at any time, the Partners mutually determine that additional capital is required for the proper conduct of the Partnership's business, each Partner shall contribute an equal share of such additional capital. If a Partner fails to make a required additional capital contribution within [Number, e.g., thirty (30)] days of written notice from the other Partner, the non-contributing Partner's percentage ownership may be diluted proportionally based on the total capital then in the Partnership, or the contributing Partner may treat their excess contribution as a loan to the Partnership, bearing interest at [Interest Rate, e.g., 5%] per annum, repayable under terms agreed upon in writing.
No Partner shall be entitled to receive any interest on their capital contributions, except as otherwise expressly provided in this Agreement.
No Partner shall withdraw any part of their capital contribution without the prior written consent of the other Partner.
All funds of the Partnership shall be deposited in its name in such checking account or accounts as shall be designated by the Partners. All withdrawals therefrom are to be made upon checks signed by [Either Partner / Both Partners / Specific Partner for specific amounts]. The Partners shall establish a primary operating bank account at [Name of Bank] located at [Bank Branch Address].
The net profits and net losses of the Partnership (after deduction of all Partnership expenses, including any salaries or draws agreed upon pursuant to Section 6.3) shall be determined according to generally accepted accounting principles (GAAP) and shall be divided equally between the Partners (50% to [Your Chosen Short Name or Initial] and 50% to [Partner's Chosen Short Name or Initial]).
Distributions of net profits shall be made at such times and in such amounts as the Partners may mutually agree, but at least [Frequency, e.g., quarterly], provided that the Partnership has sufficient cash flow and such distributions do not impair the Partnership's ability to meet its financial obligations.
The Partnership shall maintain complete and accurate books of account of the Partnership's affairs at its principal place of business. Such books shall be kept on a [Cash/Accrual] basis of accounting and shall be open to inspection and examination by either Partner or their authorized representative at any reasonable time.
The fiscal year of the Partnership shall end on [Date, e.g., December 31st] of each year.
Within [Number, e.g., ninety (90)] days after the close of each fiscal year, the Partner responsible for finances ([Your Chosen Short Name or Initial]) shall furnish the other Partner with a statement of profit and loss for the fiscal year and a balance sheet as of the close of the fiscal year.
a. [Your Chosen Short Name or Initial] shall be primarily responsible for client outreach, business development, and financial management, including bookkeeping, invoicing, and tax preparation coordination.
b. [Partner's Chosen Short Name or Initial] shall be primarily responsible for all aspects of design work, project execution, project management (including timeline management and client deliverables), and the management of any freelance contractors.
a. [Partner's Chosen Short Name or Initial] is authorized to engage freelance contractors for projects as needed, provided that any single freelance engagement or project-related expense exceeding Two Thousand Dollars ($2,000.00) requires prior written approval from [Your Chosen Short Name or Initial].
b. Neither Partner shall, without the prior written consent of the other Partner, incur any debt or liability on behalf of the Partnership in excess of [Amount, e.g., Five Thousand Dollars ($5,000.00)] not in the ordinary course of business, nor shall they assign, mortgage, or sell their share in the Partnership or its assets, or enter into any contract outside the ordinary course of Partnership business.
Each Partner shall devote [e.g., substantially all of their business time and attention / a minimum of X hours per week] to the business of the Partnership and shall use their best efforts to promote its success. Any outside business activities must be disclosed to the other Partner and must not conflict with the interests of the Partnership.
The Partners [shall not receive a salary / may receive a guaranteed payment of $[Amount] per [Month/Year], subject to annual review and mutual agreement]. Such payments shall be treated as an expense of the Partnership before the calculation of net profits or losses. (Alternatively: Any draws taken by Partners shall be mutually agreed upon in advance and shall be offset against their respective share of profits.)
The Partners shall have equal rights in the management and conduct of the Partnership's business. All Partnership decisions shall be made by mutual agreement and consensus whenever possible. Each Partner shall have one (1) vote.
In the event the Partners are unable to reach a consensus on a material decision concerning the Partnership's business or operations after good faith discussion for a period of at least [Number, e.g., fourteen (14)] days, the matter shall be submitted to mediation as outlined in Section 11 (Dispute Resolution). If mediation fails to resolve the deadlock and the matter is critical to the continued operation of the Partnership, it may be grounds for dissolution under Section 9.
Regular meetings of the Partners shall be held [Frequency, e.g., weekly or monthly] at a time and place mutually agreed upon, to discuss the business and affairs of the Partnership. Special meetings may be called by either Partner upon [Number, e.g., forty-eight (48)] hours' written notice to the other Partner.
Either Partner may voluntarily withdraw from the Partnership upon providing not less than [Number, e.g., ninety (90)] days' prior written notice to the other Partner.
Upon withdrawal, the value of the withdrawing Partner's interest shall be determined as follows: one hundred percent (100%) of the withdrawing Partner's share of the average Net Revenue of the Partnership for the twelve (12) full calendar months immediately preceding the effective date of withdrawal. "Net Revenue" for this purpose shall mean gross revenues less returns, allowances, and direct costs of goods sold (if any), but before deduction of operating expenses or Partner salaries/draws. The calculation shall be performed by the Partnership's accountant or a mutually agreed-upon third-party valuator.
The remaining Partner shall have the option to purchase the withdrawing Partner's interest at the valuation determined in Section 8.2. The purchase price shall be paid by the Partnership or the remaining Partner to the withdrawing Partner within ninety (90) days from the effective date of withdrawal. Payment may be made in a lump sum or in [Number, e.g., three (3)] equal monthly installments, with the first installment due within the said ninety (90) day period. If paid in installments, the unpaid balance shall not bear interest. (Alternatively: the unpaid balance shall bear interest at [Rate]% per annum).
If the remaining Partner is unable or unwilling to purchase the withdrawing Partner's interest within the specified timeframe, the Partnership shall be dissolved in accordance with Section 9.
A Partner shall be deemed to have withdrawn from the Partnership (an "Event of Dissociation") upon the occurrence of any of the following events:
a. The death of the Partner.
b. A judicial determination of the Partner's incapacity to perform their duties under this Agreement.
c. The bankruptcy of the Partner.
d. A material breach of this Agreement by the Partner that remains uncured for [Number, e.g., thirty (30)] days after written notice from the other Partner.
In the event of an Involuntary Withdrawal under 8.5(a) or 8.5(b), the buyout provisions of Section 8.2 and 8.3 shall apply, with the Partner's estate or legal representative acting on their behalf. In the event of 8.5(c) or 8.5(d), the valuation may be subject to adjustments for damages caused by the breach or circumstances of bankruptcy.
The Partnership shall be dissolved and its affairs wound up upon the earliest to occur of the following:
a. The mutual written agreement of all Partners.
b. The expiration of the term, if any, specified in Section 3.
c. An event that makes it unlawful for all or substantially all of the business of the Partnership to be continued.
d. The sale or disposition of all or substantially all of the Partnership's assets.
e. The withdrawal, death, bankruptcy, or incapacity of a Partner, if the remaining Partner does not elect to, or is unable to, purchase the dissociated Partner's interest pursuant to Section 8.
f. Entry of a decree of judicial dissolution.
Upon dissolution, the Partners (or the remaining Partner and the legal representative of the dissociated Partner) shall proceed with reasonable promptness to wind up the affairs of the Partnership. The Partnership assets shall be applied in the following order of priority:
a. To pay or provide for all debts and liabilities of the Partnership owed to third-party creditors.
b. To pay or provide for all debts and liabilities of the Partnership owed to Partners (other than for capital and profits).
c. To repay the capital contributions of each Partner.
d. Any remaining assets shall be distributed to the Partners in accordance with their profit-sharing percentages as set forth in Section 5.1.
Upon the withdrawal (voluntary or involuntary) or dissociation of a Partner from the Partnership for any reason, the departing Partner agrees that for a period of one (1) year following the effective date of such withdrawal or dissociation, they shall not, directly or indirectly, solicit or attempt to solicit business from any person or entity who was a client of the Partnership at the time of withdrawal/dissociation or within the twelve (12) months preceding it, for the purpose of providing services competitive with those offered by the Partnership. This restriction shall apply within the City of Los Angeles, County of Los Angeles, California.
a. Pre-existing IP: Any intellectual property owned by a Partner prior to the formation of the Partnership or developed independently of Partnership activities shall remain the sole property of that Partner, even if used by the Partnership (unless a separate written license or assignment is made to the Partnership).
b. Partnership IP: All intellectual property, including but not limited to designs, inventions, discoveries, trade secrets, copyrights, and trademarks, created or developed by either Partner in the course of the Partnership's business or using Partnership resources, shall be the sole and exclusive property of the Partnership. Upon dissolution, Partnership IP shall be valued and distributed as an asset of the Partnership.
Each Partner acknowledges that during the term of the Partnership, they will have access to confidential information of the Partnership and its clients, including but not limited to business plans, financial data, client lists, and trade secrets ("Confidential Information"). Each Partner agrees not to disclose or use any Confidential Information for any purpose other than the legitimate business of the Partnership, both during and after the term of the Partnership, except as required by law or with the written consent of the other Partner.
In the event of any dispute, claim, question, or disagreement arising from or relating to this Agreement or the breach thereof, the Partners shall first use their best efforts to settle the dispute through direct, good faith negotiations.
If the dispute cannot be settled through negotiation within [Number, e.g., thirty (30)] days, the Partners agree to endeavor to settle the dispute by mediation. The Partners shall mutually agree upon a single mediator. If the Partners cannot agree on a mediator within [Number, e.g., fourteen (14)] days, a mediator shall be appointed by [Name of Mediation Service, e.g., JAMS or a local bar association mediation service]. The costs of mediation shall be shared equally between the Partners.
If mediation is unsuccessful in resolving the dispute within [Number, e.g., sixty (60)] days after the selection of a mediator, or if either Partner fails to participate in mediation in good faith, either Partner may then pursue any other available legal or equitable remedies.
This Agreement and all matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without regard to its conflict of laws principles.
This Agreement constitutes the entire agreement and understanding between the Partners with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, inducements, and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof.
This Agreement may be amended, modified, or supplemented only by a written instrument executed by both Partners.
Any notice, demand, or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been sufficiently given or served if sent by certified mail, return receipt requested, postage prepaid, or by a nationally recognized overnight courier service, addressed to the Partner at the address set forth at the beginning of this Agreement or to such other address as a Partner may from time to time designate by written notice to the other Partner. Notices shall be effective upon receipt.
If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
No waiver of any provision of this Agreement shall be effective unless it is in writing and signed by the Partner against whom the waiver is asserted. The failure of any Partner to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that Partner of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
The headings in this Agreement are inserted for convenience only and shall not affect the interpretation of this Agreement.
This Agreement shall be binding upon and inure to the benefit of the Partners and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronic signatures shall be considered as effective as original signatures.
the Partners have duly executed this Partnership Agreement as of the Effective Date first written above.
____________________________
[Your Full Legal Name]
____________________________
[Partner's Full Legal Name]
Drafted by 8contract.com
This optimized Contract B is more detailed and includes additional clauses commonly found in partnership agreements. Remember to replace all bracketed placeholders [ ] with your specific information. While this AI-generated contract is more comprehensive, it is still strongly recommended to have this agreement reviewed by a qualified attorney in California to ensure it fully protects your interests and complies with all applicable laws, especially regarding partnership liabilities, tax implications, and the enforceability of specific clauses like non-solicitation in California.
Certainly! Below is Contract B, which optimizes and supplements Contract A for your “Pixel & Paper” partnership. The contract adds industry-typical and risk-control clauses, and each section is expanded for detail and rigor while retaining your specified arrangements. Supplementary clauses are written with “I recommend…” and are included in a way you can use directly after filling in your details. This draft is ready for direct use.
This Partnership Agreement (“Agreement”) is made and entered into as of [Effective Date], by and between [Your Name], residing at [Your Address], and [Partner’s Name], residing at [Partner’s Address] (collectively, the “Partners”).
This Agreement formalizes the establishment of a general partnership under the laws of the State of California, to conduct business as “Pixel & Paper” (the “Partnership”). The Partnership’s principal office shall be located at [Principal Business Address], or at any other location as mutually agreed in writing by the Partners.
The purpose of the Partnership is to engage in the business of providing design consulting services, including, but not limited to, graphic design, branding strategy, digital content creation, and related business services.
This Partnership shall commence as of [Effective Date] and shall continue until terminated as provided herein.
Each Partner shall make an initial capital contribution of five thousand dollars ($5,000.00). The capital accounts of each Partner will be maintained according to generally accepted accounting principles (GAAP).
I recommend including: Any additional capital contributions required for the business shall be made equally by the Partners, unless otherwise agreed in advance and in writing by both Partners. Failure to contribute required additional capital, after written notice and a reasonable cure period of 30 days, shall result in dilution of the non-contributing Partner’s interest based on the proportion of contributions made up to that date.
I recommend: Profits, losses, and distributions shall be tracked through separate capital accounts for each Partner and updated at least annually as part of the Partnership’s financial reporting.
All net profits and net losses shall be allocated and distributed equally (50/50) between the Partners, irrespective of the Partners’ roles and responsibilities, unless otherwise amended with written consent of both Partners.
I recommend: Distributions of profits will occur on a quarterly basis, after the payment of all operating expenses, taxes, and the establishment of any reserve funds mutually agreed upon by the Partners.
[Your Name] shall oversee client outreach, business development, and finances, including all bookkeeping, invoicing, and payments. [Partner’s Name] shall be primarily responsible for design execution, client deliverables, and day-to-day project management.
Each Partner has authority to bind the Partnership for day-to-day transactions. Any commitment or expense exceeding two thousand dollars ($2,000.00) requires prior written approval from both Partners.
I recommend: The Partnership shall meet no less than monthly to review finances, outstanding projects, and business strategy, and to address any management concerns. Detailed meeting minutes will be recorded and retained with Partnership records.
I recommend: No Partner shall use Partnership funds for personal purposes, and any reimbursement requests must be accompanied by receipts and approved by both Partners.
Decisions shall be made by mutual consensus if possible. In matters where consensus cannot be reached, a vote shall be held; in the event of a tie, the dispute shall be submitted to mediation in accordance with Section 14.
I recommend: If mediation does not resolve the deadlock, either Partner may initiate binding arbitration under the rules of the American Arbitration Association in Los Angeles County, California.
I recommend: All Partnership funds shall be deposited in the business bank account established for the Partnership at [Bank Name], requiring the signature or electronic approval of both Partners for withdrawals and payments over $2,000.00. The Partnership’s books and records shall be kept current and made available for inspection by either Partner at any reasonable time.
I recommend: No new Partner may be admitted into the Partnership without the unanimous written consent of the existing Partners. Prior to admission, the new Partner must execute a joinder agreement to be bound by all terms of this Agreement. The new Partner’s capital contribution, profit/loss sharing percentage, and role in management must be specified in an addendum signed by all Partners.
A Partner may withdraw by providing at least 60 days’ advance written notice. The value of the withdrawing Partner’s ownership interest (“Buyout Amount”) will be the average gross monthly revenue of the Partnership during the previous 12 months multiplied by one (1). Payment shall be made to the withdrawing Partner within 90 days of withdrawal notice unless otherwise agreed in writing.
I recommend: If the Partnership cannot pay the Buyout Amount in full within 90 days, the remaining balance shall accrue interest at a rate of 3% per annum until paid. Alternatively, the Partnership may elect to convert the unpaid balance to an unsecured promissory note, payable in up to 6 equal monthly installments.
I recommend: Upon withdrawal, the departing Partner shall deliver all business materials, intellectual property, passwords, and client information belonging to the Partnership, and shall cooperate in business transition for at least two (2) weeks after departure at no additional cost.
The Partnership may be dissolved by mutual written consent of the Partners, withdrawal of a Partner (if not bought out as per Section 10), insolvency, bankruptcy, or as otherwise required by law. Upon dissolution, after paying all debts and obligations, any remaining assets will be distributed proportionally to the final capital account balances of the Partners.
I recommend: A detailed list of Partnership assets and outstanding liabilities shall be prepared within 30 days of dissolution. Liquidation of assets shall be handled by mutual agreement, with preference to assignment of client contracts to the Partner best able to fulfill them and notification of dissolution to all clients and service providers.
The withdrawing or terminated Partner agrees not to solicit or induce any existing clients of the Partnership, or to solicit the Partnership’s employees or contractors, for one (1) year within Los Angeles, California.
I recommend: Both Partners shall maintain the confidentiality of all Partnership information, trade secrets, client data, and proprietary processes, and shall not disclose such information to any third party during or after the term of the Partnership.
I recommend: All work product, designs, deliverables, and intellectual property developed during the Partnership shall be the sole property of the Partnership, unless otherwise agreed in writing.
I recommend: The Partnership shall maintain general business liability insurance and, where applicable, professional liability (errors and omissions) insurance in amounts agreed upon by both Partners. The cost of insurance will be treated as a Partnership expense.
All disputes arising out of this Agreement shall first be submitted to mediation before a mutually agreed mediator in Los Angeles County, California, with costs shared equally. If mediation does not result in resolution, either Partner may pursue binding arbitration under the rules of the American Arbitration Association, with the arbitrator’s decision being final and enforceable in any court of law.
I recommend: The Partnership shall elect a tax matters partner responsible for communication with tax authorities and overseeing preparation and filing of all required federal, state, and local tax returns. The Partnership will be taxed as a pass-through entity unless otherwise unanimously agreed by the Partners.
I recommend: Each Partner represents and warrants that they are not restricted or prohibited, contractually or otherwise, from entering into this Agreement and fulfilling their obligations hereunder.
I recommend: Each Partner agrees to indemnify and hold harmless the other Partner and the Partnership from any claim, loss, or liability arising from that Partner’s gross negligence, willful misconduct, or material breach of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Partnership Agreement as of the date first above written.
____________________________
[Your Name]
____________________________
[Partner’s Name]
Drafted by 8contract.com
This Partnership Agreement (the "Agreement") is made and effective as of this [Date], by and between [Your Name], residing at [Your Address], and [Partner's Name], residing at [Partner's Address].
The parties hereby form a general partnership under the laws of the State of California under the name "Pixel & Paper" (the "Partnership"). This Partnership is formed for the purpose of engaging in and carrying on a design consulting business and all related activities as the Partners may from time to time agree upon.
The purpose of the Partnership is specifically to operate a design consulting business, which includes but is not limited to, providing graphic design services, web design services, branding, and other related creative services as agreed upon by the Partners.
This Partnership shall commence on the effective date of this Agreement and shall continue until terminated as provided herein or by mutual written agreement of the Partners.
Each Partner shall contribute Five Thousand Dollars ($5,000.00) to the capital of the Partnership upon the execution of this Agreement. These initial capital contributions shall be deposited into the Partnership's designated bank account. The Partners shall maintain individual capital accounts reflecting their contributions, withdrawals, and share of profits and losses. If additional capital is required for the operation of the Partnership, the Partners shall contribute equally to meet such needs. In the event a Partner fails to contribute their required share of additional capital within [Number] days of a written request from the other Partner, the non-contributing Partner's percentage ownership in the Partnership may be diluted proportionally based on the value of the additional capital contributed by the contributing Partner(s), as determined by a mutually agreed-upon third-party valuation.
The net profits and net losses of the Partnership, after payment of all expenses and obligations, shall be divided equally between the Partners (50/50) and credited or debited to their respective capital accounts at the end of each fiscal year.
The Partners shall participate equally in the management and operation of the Partnership. Decisions regarding the day-to-day business operations shall be made by consensus whenever possible. Major decisions, including but not limited to, entering into significant contracts (exceeding [Specific Amount]), taking on debt, changing the nature of the business, admitting new partners, or dissolving the Partnership, shall require the unanimous written consent of both Partners. In the event of a deadlock on any decision, the Partners agree to first attempt to resolve the dispute through mediation, as outlined in Section 11.
If either Partner desires to withdraw from the Partnership for any reason, including voluntary withdrawal, death, or disability, they shall provide written notice to the other Partner at least [Number] days in advance of their intended withdrawal date. The value of the withdrawing Partner's share shall be determined by multiplying the average monthly gross revenue of the Partnership for the twelve (12) full calendar months immediately preceding the effective date of withdrawal by one (1). This valuation shall be a good faith estimate and may be subject to adjustment based on outstanding liabilities. The remaining Partner(s) or the Partnership shall have ninety (90) days from the effective date of the withdrawal notice to purchase the withdrawing Partner's share at the determined value. Payment may be made in a lump sum or in installments as mutually agreed upon in writing. If the remaining Partner(s) or the Partnership are unable to purchase the withdrawing Partner's share within the specified timeframe, the Partnership may be subject to dissolution in accordance with Section 9.
The Partnership may be dissolved upon the mutual written agreement of the Partners or upon the occurrence of any event that makes it unlawful for the business of the Partnership to be carried on. Upon dissolution, the Partnership shall be wound up in an orderly manner. The assets of the Partnership shall be liquidated, and the proceeds shall be applied first to the payment of the Partnership's debts and liabilities, and then to the repayment of the Partners' capital accounts. Any remaining balance shall be distributed equally between the Partners.
Upon the termination of this Agreement for any reason, including the withdrawal of a Partner or dissolution of the Partnership, the withdrawing or former Partner agrees not to directly or indirectly solicit, divert, or attempt to solicit or divert any person or entity who was a client of the Partnership during the twelve (12) months immediately preceding the termination date, for the purpose of providing competing services for a period of one (1) year within the City of Los Angeles, County of Los Angeles, California.
Any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach thereof, shall be settled first by mediation. The Partners shall mutually agree upon a single mediator within [Number] days of a written request for mediation. The costs of mediation shall be shared equally between the Partners. If the dispute is not resolved through mediation within [Number] days of the commencement of mediation, the Partners are free to pursue other legal or equitable remedies available to them under the laws of the State of California.
This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws principles.
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, between the parties with respect to such subject matter.
I recommend adding the following clauses to further strengthen the agreement:
I recommend adding a clause regarding Partnership Bank Account: The Partnership shall maintain a separate bank account at a financial institution mutually agreed upon by the Partners. All Partnership funds shall be deposited into this account, and all expenses shall be paid from this account. Both Partners shall be required signatories on the Partnership bank account.
I recommend adding a clause regarding Accounting and Records: The Partnership shall maintain accurate and complete books and records of all transactions. The fiscal year of the Partnership shall end on [Month and Day]. The books and records shall be kept at the principal place of business of the Partnership and shall be open to inspection by each Partner at any reasonable time. A financial statement shall be prepared at least annually.
I recommend adding a clause regarding Indemnification: The Partnership shall indemnify and hold harmless each Partner from and against any and all claims, demands, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with the business of the Partnership, except for those arising from a Partner's gross negligence, willful misconduct, or breach of this Agreement.
I recommend adding a clause regarding Confidentiality: Each Partner agrees to maintain the confidentiality of all non-public information concerning the Partnership, its business, clients, and financial affairs. This obligation of confidentiality shall survive the termination of this Agreement.
I recommend adding a clause regarding Representations and Warranties: Each Partner represents and warrants that they have the full power and authority to enter into this Agreement and to perform their obligations hereunder, and that their entry into this Agreement does not violate any other agreement to which they are a party.
I recommend adding a clause regarding Amendments: This Agreement may be amended only by a written instrument signed by both Partners.
I recommend adding a clause regarding Notices: Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered personally, sent by certified mail (return receipt requested), or by recognized overnight courier service, to the addresses of the Partners set forth in the preamble of this Agreement.
I recommend adding a clause regarding Severability: If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be severed from this Agreement, and the remaining provisions shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
____________________________
[Your Name]
____________________________
[Partner's Name]
drafted by 8contract.com
This Partnership Agreement (the "Agreement") is made and effective as of this [Date], by and between [Your Name], residing at [Your Address], and [Partner's Name], residing at [Partner's Address] (collectively referred to as the "Partners").
This clause states that the Partners are forming a general partnership under California law. The Partnership shall operate under the name "Pixel & Paper" (the "Partnership"). A fundamental clause, clarifying the purpose of establishing the partnership and its formal recognition.
The purpose of the Partnership is to operate a design consulting business, which includes, but is not limited to, graphic design, branding, digital marketing, and related services. This clause explicitly defines the nature of the business, which is essential for setting the direction and operational activities of the Partnership.
This Partnership shall commence on the effective date of this Agreement and shall continue until terminated as provided herein. Certain provisions may detail conditions under which the Partnership may be voluntarily dissolved or must be dissolved due to the notice of withdrawal of a Partner.
Each Partner shall contribute Five Thousand Dollars ($5,000.00) to the capital of the Partnership. The Partners shall maintain equal capital accounts. Contributions shall include cash, property, or services, which should be clearly outlined. If additional capital is required in the future, both Partners agree to contribute equally. Any failure to provide additional capital may result in a dilution of the Partner's share proportional to their contributions.
The net profits and losses of the Partnership shall be divided equally between the Partners (50/50), regardless of the amount of capital each Partner has contributed or their respective roles in the business. This clause should include the timing of profit distributions, such as monthly or quarterly, to avoid disputes about cash flow.
[Your Name] shall be responsible for client outreach and finances, the day-to-day operation of financial duties, and maintaining financial records. [Partner's Name] shall manage design work and client projects, overseeing freelancers and other contractors to meet project requirements. This clause should also specify limitations of authority, such as spending limits without mutual consent, allowing for checks and balances within the Partnership.
The Partners shall jointly participate in the management and operation of the Partnership. Decisions regarding the Partnership's operations shall be made by consensus whenever possible. In the event of a deadlock, mediation shall be the default resolution method prior to any decision being made by an external mediator, thus ensuring all issues are amicably resolved.
If either Partner desires to withdraw from the Partnership, they shall provide a minimum of thirty (30) days' written notice to the other Partner. The value of the withdrawing Partner's share will be computed by applying a one-time revenue-based formula, based on the average annual revenue for the preceding twelve (12) months. The Partnership will have ninety (90) days from the date of the withdrawal notice to buy out the withdrawing Partner's interest, and all assessment costs related to valuations shall be the responsibility of the remaining Partner.
The dissolution of the Partnership may take place voluntarily upon the mutual agreement of the Partners or upon the occurrence of specific events outlined within the Agreement, such as incapacity of a Partner or prolonged business inactivity for six (6) months or more. A detailed procedure for winding up the Partnership’s affairs, including the allocation of remaining assets, shall be clearly defined in the event of dissolution.
Upon termination of this Agreement, either Partner agrees not to solicit clients from the Partnership for a period of one (1) year within the confines of Los Angeles, LA County, California. This clause should also define "solicit" to include direct and indirect attempts to engage with existing clients, thereby offering clarity and enforceability.
Any disputes arising from this Agreement shall be addressed through mediation in good faith. The Partners shall mutually agree upon a qualified mediator, and the cost of mediation shall be split evenly between the Partners. If mediation proves unsuccessful, the Partners may independently seek legal remedies.
This Agreement shall be governed by and construed following the laws of the State of California, wherein all provisions shall align with statutory requirements and regulations.
This Agreement represents the entire agreement between the Partners regarding the subject matter herein and supersedes any prior agreements, discussions, or negotiations, whether oral or written, regarding the same. It serves to avoid any confusion by laying all terms in one comprehensive document.
The Partners agree to indemnify and hold each other harmless from any and all claims, liabilities, damages, and expenses (including reasonable attorney's fees) arising out of the performance of the Partnership’s business, excluding instances of willful misconduct or gross negligence by the indemnified Partner. This clause enhances protection for both partners regarding liabilities occurring in the course of business operations.
This Agreement may be amended or modified only by a written instrument signed by both Partners. All amendments must clearly document the nature of the changes, ensuring transparent modification processes that reflect both Partners' assent.
The Partners agree to maintain strict confidentiality regarding all business affairs of the Partnership and agree not to disclose any trade secrets or proprietary information to any third party without the prior written consent of the other Partner, effective during and after the term of this Agreement.
The Partnership shall procure and maintain general liability insurance and any other forms of insurance deemed necessary for the operation of the business. Insurance policies should be periodically reviewed to ensure adequate coverage, mitigating risks associated with business operations.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
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[Your Name]
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[Partner's Name]
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