South Dakota partnership agreement template

South Dakota Partnership Agreement

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

[Partner 1 Name], residing at [Partner 1 Address], [Partner 1 Identification Details]

[Partner 2 Name], residing at [Partner 2 Address], [Partner 2 Identification Details]

Additional Partners (Option A: Add additional partners as necessary):

[Partner 3 Name], residing at [Partner 3 Address], [Partner 3 Identification Details]

Additional Partners (Option B: Partnership will have a maximum of [Number] partners.)

The parties above-named and any additional admitted partner are collectively referred to as the "Partners".

Partnership Name and Business Purpose

The Partnership shall be known as [Partnership Name].

The principal place of business of the Partnership shall be located at [Partnership Address].

The purpose, nature, and scope of the business to be conducted by the Partnership shall be: [Description of Business Purpose].

Option A: The business purpose can be changed only with the unanimous written consent of all partners.

Option B: The business purpose can be expanded to include: [New Business Line Description].

Option C: The partnership is specifically prohibited from engaging in: [Restricted Business Activity].

Type of Partnership

Option A: General Partnership

Option B: Limited Partnership (LP). Complying with SDCL Chapter 48-7.

Option C: Limited Liability Partnership (LLP). Registered under SDCL Chapter 48-7A.

Option D: Limited Liability Limited Partnership (LLLP). Registered under SDCL Chapter 48-8.

Option E: Conversion of Status: The Partnership may convert to a different type of partnership with a [Percentage]% vote of the partners.

Option F: Dissolution: The Partnership will be subject to the dissolution provisions of SDCL Chapter 48-1 and relevant provisions specific to its chosen type (Chapters 48-7, 48-7A, 48-8).

Term and Duration

The Partnership shall commence on [Start Date].

Option A: The Partnership shall continue for a fixed term ending on [End Date].

The Partnership term will be automatically renewed for additional [Number] year periods unless [Number] months prior written notice is given by at least [Percentage]% of the partners.

Option B: The Partnership shall continue at-will.

Termination of the partnership requires [Number] days written notice to all other partners. Termination must comply with all existing contractual obligations and SDCL Chapter 48-1.

Capital Contributions

[Partner 1 Name] shall contribute the following: [Description of Contribution - e.g., $ Amount, Property Description], valued at [Dollar Amount].

[Partner 2 Name] shall contribute the following: [Description of Contribution - e.g., $ Amount, Property Description, Services Description], valued at [Dollar Amount].

Additional contributions:

Option A: Additional capital contributions may be required from time to time as determined by a [Percentage]% vote of the partners.

Option B: Partners are not required to make additional capital contributions.

Option C: Deferred contribution schedule for [Partner Name]: [Description of Schedule].

All contributions of property must be documented in writing with a bill of sale and properly recorded in the partnership's books. Capital accounts will be maintained for each partner in accordance with generally accepted accounting principles and SDCL requirements.

Profit and Loss Allocation

The net profits and losses of the Partnership shall be allocated to the Partners as follows:

[Partner 1 Name]: [Percentage]%

[Partner 2 Name]: [Percentage]%

Option A: Profits and losses will be distributed to partners on a [Frequency - e.g., quarterly, annual] basis.

Option B: Distributions will be made in the form of [Form of Distribution - e.g., Cash, Property].

Option C: Retained earnings will be used for [Purpose of Retained Earnings].

Option D: The profit and loss allocation may be modified by a [Percentage]% vote of the partners.

Management Rights and Voting

Each Partner shall have the right to participate in the management of the Partnership.

Voting procedures:

Option A: Decisions shall be made by a majority vote of the Partners.

Option B: Certain major decisions (e.g., sale of assets, borrowing over [Dollar Amount]) shall require unanimous consent.

Option C: Decisions regarding [Specific Business Matters] require [Percentage]% of the partners.

Authority Limits: No partner may bind the partnership to any contract exceeding [Dollar Amount] without prior written approval from a majority of the other partners. This does not affect personal liability under SDCL 48-1 or any partner’s personal obligations.

Partner Liability Limits: To the fullest extent allowed under South Dakota law, the partners’ personal liability is limited as agreed in this agreement, subject to statutory limitations, especially concerning debts and obligations of the partnership.

Management Appointment:

Option A: [Partner Name] is appointed as the managing partner with the authority to [Description of Authority].

Option B: The managing partner can be removed by a [Percentage]% vote of the other partners.

Duties, Responsibilities, and Obligations

Each Partner shall devote such time and attention to the business of the Partnership as may be reasonably necessary.

Option A: [Partner Name] is a silent partner and will not be involved in the day-to-day operations of the Partnership.

Option B: Each partner is responsible for [Specific Responsibilities].

Each Partner shall act in good faith and deal fairly with the Partnership and the other Partners.

Admission, Withdrawal, Retirement, and Expulsion

Admission of New Partners:

Option A: New partners may be admitted with the unanimous consent of all existing Partners.

Option B: New partners may be admitted with a [Percentage]% vote of the existing Partners.

The new partner shall contribute [Description of Contribution] to the capital of the Partnership.

Withdrawal/Retirement:

A Partner may withdraw or retire from the Partnership by giving [Number] days' written notice to the other Partners.

The withdrawing/retiring Partner shall be entitled to a buyout of his/her Partnership interest, as determined by [Valuation Method - e.g., agreed-upon value, independent appraisal].

Expulsion:

A Partner may be expelled from the Partnership for [Grounds for Expulsion] by a [Percentage]% vote of the other Partners.

The expelled Partner shall be entitled to a buyout of his/her Partnership interest, as determined by [Valuation Method - e.g., agreed-upon value, independent appraisal].

South Dakota Filing Requirement: Upon withdrawal, retirement, or expulsion, any necessary filings will be made with the South Dakota Secretary of State as required for the relevant type of partnership (LP, LLP, LLLP).

Automatic Buyout: In the event of a partner's [Triggering Event, e.g., death, disability], the partnership is obligated to buy out the partner’s interest under the following terms: [Terms of Buyout].

Transfer or Assignment of Partnership Interests

No Partner shall sell, transfer, assign, or encumber his/her Partnership interest without the prior written consent of [Percentage]% of the other Partners.

Option A: The Partnership shall have a right of first refusal to purchase the Partnership interest at the same price and terms offered by the prospective purchaser.

Involuntary Transfers: In the event of death, disability, or bankruptcy of a partner, the following will occur: [Description of Procedures].

South Dakota Recording Requirements: Any transfer of interest that results in a change of ownership structure for an LP or LLLP may require recording with the appropriate county register of deeds to maintain statutory compliance.

Tax Treatment and Fiscal Year

The Partnership shall be treated as a partnership for federal and state income tax purposes.

The fiscal year of the Partnership shall end on [Date].

[Partner Name] shall be responsible for filing all necessary tax returns.

Option A: The Partners designate [Partner Name] as the Partnership Representative for purposes of IRS audits.

Option B: The Partnership shall comply with all South Dakota state tax obligations, including sales tax collection if applicable.

Non-Compete, Non-Solicitation, and Confidentiality

Option A: (No Clause)

Option B: During the term of this Agreement and for a period of [Number] years thereafter, no Partner shall, directly or indirectly, compete with the Partnership within a [Geographic Area].

Option C: During the term of this Agreement and for a period of [Number] years thereafter, no Partner shall solicit the clients or employees of the Partnership.

Option D: All Partners shall maintain the confidentiality of the Partnership's confidential information.

Enforceability: The parties acknowledge that the reasonableness of these clauses is subject to South Dakota law, and shall be construed accordingly.

Record-Keeping and Access to Books

The Partnership shall maintain accurate and complete books and records.

All Partners shall have access to the books and records of the Partnership at all reasonable times.

The Partnership shall prepare financial statements on a [Frequency - e.g., monthly, quarterly, annual] basis.

[Partner Name] shall be responsible for maintaining the Partnership's books and records.

South Dakota Compliance: The partnership will maintain all records necessary to comply with South Dakota's public filing and record access requirements, as applicable to the type of partnership formed.

Bank Accounts

The Partnership shall maintain one or more bank accounts.

[Partner Names] shall be authorized signatories on the Partnership's bank accounts.

Option A: Transactions exceeding [Dollar Amount] shall require dual signatures.

Option B: Any transaction over [Dollar Amount] requires written approval from [Percentage]% of the partners.

Insurance

The Partnership shall maintain the following insurance policies:

Partnership liability insurance with coverage of at least [Dollar Amount].

Option A: Key man insurance on [Partner Name] in the amount of [Dollar Amount].

Option B: Property insurance on the partnership’s assets.

Option C: The partnership may, at its discretion, obtain additional insurance coverage.

The partnership will conform to any insurance obligations imposed by South Dakota law, given the specific business and partnership type.

Dispute Resolution

Any dispute arising out of or relating to this Agreement shall be resolved through:

Option A: Negotiation.

Option B: Mediation, administered by [Mediation Organization].

Option C: Arbitration, administered by [Arbitration Organization] in accordance with its rules.

If arbitration is required, the arbitration shall be held in [City, State].

Venue Selection: For disputes not subject to mandatory arbitration or mediation, the parties consent to jurisdiction in the state courts of South Dakota, located in [County] County.

This Section may be modified by the unanimous written consent of all Partners.

Governing Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the laws of the State of South Dakota.

The exclusive jurisdiction and venue for any action or proceeding arising out of or relating to this Agreement shall be in the state or federal courts located in South Dakota.

Modification and Waiver

This Agreement may be amended or modified only by a written instrument signed by [Percentage]% of all the Partners.

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.

Dissolution and Winding Up

The Partnership may be dissolved upon the occurrence of any of the following events:

The expiration of the term of the Partnership (if applicable).

The agreement of [Percentage]% of the Partners.

The death, bankruptcy, or withdrawal of a Partner (subject to any buy-sell agreement).

Any event that makes it unlawful or impossible to carry on the business of the Partnership.

Upon dissolution, the assets of the Partnership shall be liquidated and distributed in the following order:

To creditors of the Partnership.

To the Partners in proportion to their capital accounts.

Any remaining assets shall be distributed in accordance with the profit and loss sharing ratios set forth in this Agreement.

South Dakota Requirements: Dissolution and winding up will comply with SDCL Chapter 48-1 and any specific filing or notice requirements of the Secretary of State.

Partner’s vote required to dissolve: Dissolution will only occur if [Percentage]% of partners vote in favor.

Indemnification and Liability Limitation

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 conduct of the Partnership's business.

Option A: No partner shall be indemnified for losses arising from their own gross negligence or willful misconduct.

Option B: Indemnification is limited to the extent allowed under South Dakota law.

Option C: Indemnity applies to all partners and partnership employees only.

Representations and Warranties

Each Partner represents and warrants that he/she has the full right, power, and authority to enter into this Agreement and to perform his/her obligations hereunder.

Each Partner represents and warrants that the execution and delivery of this Agreement does not violate any other agreement to which he/she is a party.

Option A: Partners have performed due diligence on the state of affairs of the company prior to signing.

Miscellaneous

Force Majeure: Neither party shall be liable for any delay or failure to perform its obligations under this Agreement due to any cause beyond its reasonable control.

Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Assignment: This Agreement shall not be assigned by any Partner without the prior written consent of the other Partners.

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.

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.

South Dakota-Specific Considerations

Required Filings: The Partnership acknowledges its responsibility to make any required filings with the South Dakota Secretary of State, particularly for Limited Partnerships, Limited Liability Partnerships, or Limited Liability Limited Partnerships under SDCL Chapters 48-7, 48-7A, and 48-8.

Publication Requirements: The Partnership is aware of any publication requirements for amendments or changes to its partnership structure, as mandated by South Dakota law.

Annual Reporting: The Partnership will adhere to any annual reporting obligations specific to partnerships in South Dakota.

Right to Judicial Dissolution: Each partner is aware of the right to petition a court of competent jurisdiction in South Dakota for judicial dissolution of the partnership under state law.

Partner Compensation and Reimbursement

Option A: No compensation will be paid to partners outside of profit distributions.

Option B: [Partner Name] will receive a guaranteed payment of [Dollar Amount] per [Time Period] for [Services Rendered].

Option C: Partners are entitled to reimbursement for reasonable expenses incurred on behalf of the partnership, according to the following policy: [Detailed Reimbursement Policy].

Employee Hiring and Supervision

Option A: Partners have equal authority to hire and supervise employees.

Option B: [Partner Name] has primary authority for hiring and supervising employees.

Option C: All hiring decisions require approval from [Percentage]% of partners.

Succession Planning

Option A: In the event of a partner's death or incapacity, the partner's interest will pass to their designated beneficiary or estate, subject to the terms of this agreement.

Option B: The partnership will purchase life insurance on each partner to fund the buyout of their interest in the event of death.

Option C: Upon the death of [Partner Name], the remaining partner(s) will have the option to buy out the deceased partner's share, subject to the buy-sell agreement attached as Exhibit A.

Parties shall comply with South Dakota estate and succession laws where applicable.

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)