New York partnership agreement template

New York Partnership Agreement

This Partnership Agreement (the "Agreement") is made and effective as of [Date], by and between:

• [Partner 1 Name], residing at [Partner 1 Address] ("Partner 1"); and
• [Partner 2 Name], residing at [Partner 2 Address] ("Partner 2").
• (Add more partners as needed.)

1. Formation of Partnership

• The Partners hereby agree to form a partnership (the "Partnership") under the laws of the State of New York.
  • Option A: General Partnership
  • Option B: Limited Partnership (Requires filing with the New York Department of State.)
• The Partnership shall operate under the name of [Business Name (DBA if applicable)].
• The principal office of the Partnership shall be located at [Principal Office Address].

2. Purpose of Partnership

• The purpose of the Partnership is to engage in the following business: [Business Purpose].
  • Option A: Broad Business Purpose
  • Option B: Specific Business Activities (e.g., "Real estate investment in Brooklyn, New York.")

3. Term of Partnership

• The Partnership shall commence on the Effective Date and shall continue:
  • Option A: At-will, until terminated as provided herein.
  • Option B: For a fixed term of [Number] years, commencing on the Effective Date.
    • Sub-Option 1: With automatic renewal for additional [Number] year terms, unless either party provides written notice of termination [Number] days prior to the end of the current term.
    • Sub-Option 2: Dissolution upon expiration of the term, unless otherwise agreed in writing.

4. Capital Contributions

• Each Partner shall contribute to the capital of the Partnership the following:
  • Partner 1: [Partner 1 Contribution Description], valued at [Dollar Amount].
  • Partner 2: [Partner 2 Contribution Description], valued at [Dollar Amount].
  • (Add contributions for additional partners as needed.)
• Methods of Valuation:
  • Option A: Agreed upon value.
  • Option B: Fair market value as determined by [Appraisal Method].
• Timeline for Contribution:
  • Option A: Contributions to be made upon execution of this Agreement.
  • Option B: Contributions to be made according to the following schedule: [Contribution Schedule].
• Additional Contributions:
  • Option A: No Partner shall be required to make additional contributions.
  • Option B: Additional contributions may be required upon a majority vote of the Partners.
    • Sub-Option 1: In proportion to their respective ownership percentages.
    • Sub-Option 2: As otherwise agreed upon by the Partners.
• Default Procedures for Non-Contribution: [Consequences for Failure to Contribute]

5. Profit and Loss Allocation

• The net profits and losses of the Partnership shall be allocated to the Partners in proportion to their respective ownership percentages, which are as follows:
  • Partner 1: [Percentage]%
  • Partner 2: [Percentage]%
  • (Add percentages for additional partners as needed.)
  • Option A: Ownership percentage equal to capital contribution ratio.
  • Option B: Ownership percentage as determined by Partner agreement.
• Distribution of Partnership Income:
  • Option A: Annual distributions of profits, less retained earnings as determined by the Partners.
  • Option B: Periodic draws against anticipated profits, subject to reconciliation at the end of the fiscal year.

6. Management and Decision-Making

• Each Partner shall have the authority to participate in the management and control of the Partnership.
• Voting Rights:
  • Option A: Each Partner shall have one vote.
  • Option B: Voting rights shall be proportional to each Partner’s ownership percentage.
• Decision-Making Requirements:
  • Option A: Ordinary business decisions shall require a majority vote of the Partners.
  • Option B: Major decisions (e.g., sale of assets, incurring significant debt) shall require unanimous consent of the Partners.
• Managing Partner:
  • Option A: There shall be no designated managing partner.
  • Option B: [Partner Name] shall serve as the managing partner, with the authority to [Describe Authority].
• Record-Keeping: The Partnership shall maintain accurate books and records of all Partnership transactions, in compliance with New York law.

7. Duties and Responsibilities of Partners

• Each Partner shall devote such time and attention to the business of the Partnership as is reasonably necessary.
• Fiduciary Duties: Each Partner owes a fiduciary duty of loyalty and care to the Partnership and the other Partners, as required by New York law.
• Delegation of Authority: [Terms for Delegating Authority].
• Restrictions on External Business Activities:
  • Option A: Partners are free to engage in other business activities.
  • Option B: Partners shall not engage in any business that competes with the Partnership.

8. Admission and Withdrawal of Partners

• Admission of New Partners:
  • Option A: Admission of a new Partner shall require unanimous consent of the existing Partners.
  • Option B: Admission of a new Partner shall require a [Percentage]% vote of the existing Partners.
  • Required Qualifications: [Qualifications for New Partners].
  • Buy-In Terms: [Buy-In Terms for New Partners].
• Withdrawal of Partners:
  • Voluntary Withdrawal: A Partner may voluntarily withdraw from the Partnership by providing [Number] months written notice to the other Partners.
  • Involuntary Withdrawal: A Partner may be involuntarily withdrawn from the Partnership for [Reasons for Involuntary Withdrawal], upon a [Percentage]% vote of the other Partners.
  • Death of a Partner: The death of a Partner shall result in the dissolution of the partnership, unless the remaining partners agree to continue the partnership.
  • Valuation of Interest: The withdrawing Partner’s interest shall be valued at [Valuation Method].
  • Buyout Process: [Terms of Buyout].

9. Transfer of Partnership Interests

• A Partner may not transfer or assign their partnership interest without the prior written consent of the other Partners.
• Right of First Refusal:
  • Option A: The remaining Partners shall have a right of first refusal to purchase the transferring Partner’s interest.
  • Option B: No right of first refusal.
• Admission of Transferees: [Terms for Admission of Transferees].
• Restrictions on Transfer: [Restrictions on Transfer of Partnership Interests].

10. Dissolution and Winding Up

• The Partnership may be dissolved upon the occurrence of any of the following events:
  • Mutual agreement of the Partners.
  • Expiration of the term, if applicable.
  • [Other Dissolution Events].
• Liquidation Process: Upon dissolution, the assets of the Partnership shall be liquidated in an orderly manner.
• Order of Distribution of Assets: The assets of the Partnership shall be distributed in the following order:
  1. To creditors of the Partnership.
  2. To Partners in repayment of loans to the Partnership.
  3. To Partners in proportion to their respective capital accounts.
• Filing/Notice Requirements: [New York Filing and Notice Requirements for Dissolution].

11. Accounting and Audit

• Fiscal Year: The fiscal year of the Partnership shall end on [Date].
• Bookkeeping Methods: The Partnership shall maintain its books and records in accordance with [Accounting Method].
• Access Rights: Each Partner shall have access to the books and records of the Partnership.
• Accountants/Auditors:
  • Option A: No requirement for independent audit.
  • Option B: The Partnership shall engage an independent certified public accountant to audit the Partnership’s financial statements annually.

12. Tax Treatment

• The Partnership shall be treated as a partnership for federal and New York State income tax purposes.
• Allocation of K-1 Forms: Each Partner shall receive a Schedule K-1 reflecting their share of the Partnership’s income, deductions, credits, etc.
• Tax Matters Partner: [Partner Name] is hereby designated as the Tax Matters Partner for the Partnership.
• Tax Elections: [Specific Tax Elections].
• Tax Audits: [Procedures for Handling Tax Audits].

13. Partner Compensation

• Guaranteed Payments:
  • Option A: No guaranteed payments to Partners.
  • Option B: [Partner Name] shall receive a guaranteed payment of [Dollar Amount] per [Time Period].
• Salaries:
  • Option A: No salaries to Partners.
  • Option B: [Partner Name] shall receive a salary of [Dollar Amount] per [Time Period].
• Reimbursement for Expenses: Partners shall be reimbursed for reasonable and necessary expenses incurred on behalf of the Partnership.

14. Restrictions on Partners’ Activities

• Non-Compete:
  • Option A: No non-compete restrictions.
  • Option B: During the term of this Agreement and for a period of [Number] years thereafter, a Partner shall not engage in any business that competes with the Partnership within [Geographic Area]. (Ensure compliance with New York non-compete law).
• Non-Solicitation: [Non-Solicitation Terms].
• Conflicting Businesses: [Terms Regarding Partner Involvement in Conflicting Businesses].

15. Confidentiality

• Each Partner shall maintain the confidentiality of all Partnership information, including trade secrets, proprietary information, and customer lists.
• This obligation shall survive the termination of this Agreement.

16. Indemnification and Liability

• Indemnification: The Partnership shall indemnify and hold harmless each Partner from and against any and all losses, damages, liabilities, costs, and expenses arising out of the Partner’s activities on behalf of the Partnership, except to the extent such losses, damages, liabilities, costs, and expenses are caused by the Partner’s gross negligence or willful misconduct. (Consider New York law on indemnification).
• Liability: Partners are jointly and severally liable for the debts and obligations of the Partnership, unless otherwise agreed to in writing.

17. Dispute Resolution

• Internal Procedures: The Partners shall first attempt to resolve any disputes internally through good faith negotiations.
• Mediation: If internal negotiations fail, the Partners shall attempt to resolve the dispute through mediation.
• Arbitration:
  • Option A: Any dispute arising out of or relating to this Agreement shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association.
  • Option B: No arbitration.
• Jurisdiction: [Jurisdiction for Legal Disputes].
• Choice of Law: This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

18. Governing Law

• This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.

19. Miscellaneous

• Amendment: This Agreement may be amended only by a written instrument signed by all of the Partners.
• Waiver: No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom the waiver is sought to be enforced.
• 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.
• Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• Force Majeure: Neither party shall be liable for any failure to perform its obligations under this Agreement to the extent such failure is caused by a force majeure event.
• Supremacy of Agreement: In the event of any conflict between this Agreement and any other agreement or understanding between the Partners, the terms of this Agreement shall control.
• Electronic Signatures/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 shall be deemed valid and binding.

20. New York Specific Considerations

• Compliance with New York Partnership Law: This Agreement is intended to comply with the requirements of the New York Partnership Law.
• Absence of Written Agreement: The Partners acknowledge that in the absence of this written agreement, the default rules of the New York Partnership Law would apply.
• Publication/Filing: (If a limited partnership, address filing requirements with the New York Department of State).
• Special Notice Requirements: [Specific Notice Provisions required by New York Law].
• Opt-In/Opt-Out: The Partners hereby [Choose to Opt-In or Opt-Out] from [Specific Statutory Provision of New York Partnership Law].
• Joint and Several Liability: The Partners acknowledge that they are jointly and severally liable for the obligations of the Partnership, as provided by New York law, unless otherwise specifically agreed herein.
• Indemnification Against Fraud: A Partner shall be indemnified against another partner's fraudulent acts or willful misconduct.
• Voting Thresholds and Statutory Duties: Partners acknowledge voting thresholds and their statutory duties as mandated under New York Law.

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

____________________________

[Partner 1 Name]

____________________________

[Partner 2 Name]

(Add signature lines for additional partners as needed)