Pennsylvania partnership agreement template

Pennsylvania Partnership Agreement

This Partnership Agreement is made and entered into as of [Date], by and among the following partners:

• [Partner 1 Name], residing at [Partner 1 Address], with contact details: [Partner 1 Phone] and [Partner 1 Email].
• [Partner 2 Name], residing at [Partner 2 Address], with contact details: [Partner 2 Phone] and [Partner 2 Email].
• [Partner 3 Name], residing at [Partner 3 Address], with contact details: [Partner 3 Phone] and [Partner 3 Email]. (Add more partners as needed)

1. Partnership Formation and Name

The Partners hereby form a partnership under the laws of the Commonwealth of Pennsylvania.

• Option A: The partnership shall be a general partnership.
• Option B: The partnership shall be a limited partnership. (A certificate of limited partnership will be filed with the Pennsylvania Department of State.)
• Option C: The partnership shall be a limited liability partnership (LLP). (The partnership intends to register as an LLP in Pennsylvania.)

The name of the partnership shall be [Partnership Name].

2. Principal Place of Business

The principal place of business of the partnership shall be located at [Business Address]. Additional locations, if any, are: [Additional Business Locations].

3. Business Purpose

The purpose of the partnership is to engage in the following business: [Description of Business Purpose].

4. Term

The partnership shall commence on [Commencement Date].

• Option A: The partnership shall continue for an indefinite term.
• Option B: The partnership shall continue for a fixed term of [Number] years, expiring on [Expiration Date].

5. Capital Contributions

Each partner shall contribute the following capital to the partnership:

• [Partner 1 Name]: [Amount] in cash, [Description of Property] (valued at [Value]), and/or [Description of Services]. Total value: [Total Value].
• [Partner 2 Name]: [Amount] in cash, [Description of Property] (valued at [Value]), and/or [Description of Services]. Total value: [Total Value].
• [Partner 3 Name]: [Amount] in cash, [Description of Property] (valued at [Value]), and/or [Description of Services]. Total value: [Total Value]. (Add more partners as needed)

Future capital contributions:

• Option A: No future capital contributions shall be required.
• Option B: Additional capital contributions may be required upon the unanimous agreement of the partners. The amount and timing of such contributions shall be determined by the partners.

Failure to Contribute:

• Option A: Failure to make a required contribution shall result in a penalty of [Penalty, e.g., interest rate] on the unpaid amount.
• Option B: Failure to make a required contribution shall result in a dilution of the defaulting partner's interest in the partnership by [Percentage].
• Option C: Other consequences for failure to contribute: [Description of other consequences].

6. Profits, Losses, and Distributions

Profits and losses of the partnership shall be allocated as follows:

• Option A: In proportion to the partners' capital contributions.
• Option B: According to the following percentages: [Partner 1 Percentage]% to [Partner 1 Name], [Partner 2 Percentage]% to [Partner 2 Name], [Partner 3 Percentage]% to [Partner 3 Name].
• Option C: According to a formula based on [Description of Formula].

Distributions shall be made to the partners at such times and in such amounts as the partners may agree, but no less frequently than [Frequency, e.g., annually].

Draw Payments:

• Option A: Partners may take draw payments up to [Amount] per [Time Period].
• Option B: No draw payments are permitted.

Tax Allocations: Tax items will be allocated to the partners in accordance with Section 704(b) of the Internal Revenue Code and corresponding Pennsylvania state tax regulations.

7. Management

Each partner shall have the right to participate in the management of the partnership.

• Option A: Decisions shall be made by a majority vote of the partners.
• Option B: Certain decisions require unanimous consent, specifically: [List of Decisions Requiring Unanimous Consent].

Partner Responsibilities: Each partner shall devote such time and attention to the business of the partnership as may be reasonably required.

Limitations on Authority: No partner shall have the authority to bind the partnership with respect to: [List of Limitations]. (Consider including Pennsylvania-specific limitations based on partnership type.)

Meetings: Meetings of the partners shall be held [Frequency, e.g., quarterly]. Notice of meetings shall be given at least [Number] days in advance.

8. Compensation

• Option A: Partners shall not receive salaries.
• Option B: Partners shall receive the following salaries: [Partner 1 Name]: [Amount] per [Time Period], [Partner 2 Name]: [Amount] per [Time Period], [Partner 3 Name]: [Amount] per [Time Period].
• Option C: Partners shall receive guaranteed payments as follows: [Partner Name]: [Amount].

Expense Reimbursement: Partners shall be reimbursed for reasonable expenses incurred on behalf of the partnership.

9. Admission of New Partners

New partners may be admitted to the partnership only upon the unanimous consent of the existing partners.

• Option A: A new partner shall contribute capital to the partnership in an amount to be determined by the existing partners.
• Option B: A new partner's share of profits and losses shall be determined by negotiation with the existing partners.

10. Withdrawal or Removal of Partners

A partner may withdraw from the partnership by giving [Number] days' written notice to the other partners.

• Option A: Upon withdrawal, the withdrawing partner shall be entitled to receive the balance of their capital account.
• Option B: Upon withdrawal, the withdrawing partner shall be entitled to receive [Formula or Method] for the value of their interest in the partnership.

Removal of a partner: A partner may be removed by the unanimous vote of the other partners for [Cause, e.g., breach of this agreement].

Non-Competition:

• Option A: A withdrawing or removed partner shall be subject to a non-competition agreement for a period of [Number] years within a radius of [Number] miles of the principal place of business. (Consider enforceability under Pennsylvania law)
• Option B: No non-competition agreement shall apply.

11. Dissolution

The partnership shall dissolve upon the occurrence of any of the following events:

• The death, bankruptcy, or withdrawal of a partner.
• The unanimous agreement of the partners.
• The achievement of the partnership's business purpose.
• Any event causing dissolution under Pennsylvania law.

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 of the partnership.
2. To partners in proportion to their capital accounts.

Reinstatement:

• Option A: The partnership may be reinstated upon the unanimous agreement of the remaining partners following the death or withdrawal of a partner.
• Option B: The partnership may not be reinstated.

12. Transfer of Partnership Interests

No partner may transfer, sell, or assign their partnership interest without the unanimous consent of the other partners.

• Option A: Transfers to immediate family members or trusts for their benefit shall be permitted without consent.
• Option B: The other partners shall have a right of first refusal to purchase the transferring partner's interest.

13. Duties of Loyalty, Care, and Good Faith

Each partner owes to the partnership a duty of loyalty, a duty of care, and a duty of good faith and fair dealing.

• Option A: Partners may engage in activities that compete with the partnership with the consent of the other partners. (Consider limitations permissible under Pennsylvania law.)
• Option B: Partners are prohibited from competing with the partnership.

14. Accounting and Financial Management

The fiscal year of the partnership shall end on [Date]. The partnership shall maintain its books and records in accordance with generally accepted accounting principles (GAAP).

Annual Audits:

• Option A: The partnership shall conduct an annual audit of its financial statements by an independent certified public accountant.
• Option B: The partnership shall conduct an annual review of its financial statements.
• Option C: No annual audit or review is required.

Bank Accounts: The partnership shall maintain its bank accounts at [Bank Name].

15. Tax Matters

The partnership shall file all necessary federal, state, and local tax returns. The partnership shall designate [Partner Name] as the partnership representative for IRS proceedings. The partnership shall comply with all applicable Pennsylvania tax requirements, including filing the Partnership Information Return.

16. Indemnification and Liability

The partnership shall indemnify each partner against any liability incurred in connection with the partnership's business, except for liabilities arising from the partner's gross negligence or willful misconduct. (Consider limitations permissible under Pennsylvania statutes.)

Insurance: The partnership shall maintain adequate insurance coverage, including general liability insurance and workers' compensation insurance (if applicable under Pennsylvania law).

17. Confidentiality

Each partner shall maintain the confidentiality of the partnership's proprietary and sensitive information. This obligation shall continue after termination of the partnership.

18. Dispute Resolution

Any dispute arising out of or relating to this agreement shall be resolved as follows:

• Option A: Mediation.
• Option B: Arbitration in [City, State] under the rules of the American Arbitration Association.
• Option C: Litigation in the courts of the Commonwealth of Pennsylvania.

Choice of Law: This agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

Venue: The exclusive venue for any legal action relating to this agreement shall be in the courts of [County], Pennsylvania.

19. 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.

20. Amendment

This agreement may be amended only by a written instrument signed by all of the partners.

21. Insurance

The partnership shall obtain and maintain the following insurance policies: [List of Insurance Policies, e.g., general liability, key person]. Consider Pennsylvania-specific insurance needs based on the partnership’s business.

22. Entire Agreement

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.

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] (Add more partners as needed)

Witness: ____________________________ (Optional)

Notarization: (Include if required or desired under Pennsylvania law)
State of Pennsylvania, County of [County Name]:

On this [Date], before me, the undersigned, a Notary Public in and for said County and State, personally appeared [Partner 1 Name], [Partner 2 Name], and [Partner 3 Name], known to me (or satisfactorily proven) to be the persons whose names are subscribed to the within instrument and acknowledged that they executed the same for the purposes therein contained.

____________________________
Notary Public

My Commission Expires: [Date]