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Partnerships – bespoke legal advice on new and existing agreements

Partnerships remain a common way to structure a business. However, ensuring you have the right legal framework in place to protect both the business and its partners is key.

Our experienced Corporate Team can advise on all aspects of partnership law, including General Partnerships, Limited Liability Partnerships and Limited Partnerships – to ensure your business is operating with an effective written partnership agreement in place which reflects its current position.

Partnership law – what support do we provide?

We draw up new partnership agreements and provide legal advice on existing agreements as well as the applicable law. This includes the Partnership Act 1890.

This covers:

  • The formation and structuring of General Partnerships, LLPs and Limited Partnerships.
  • What to do when new partners join the partnership and when partners die or retire.
  • How to manage disputes and termination
  • The process for dissolving a partnership.

Get in touch

For more advice on this area of the law, please contact Partner Marina MacLennan, Head of the Corporate and Commercial Team.

Marina MacLennan
Marina MacLennan Partner Main office: Bristol – Wine Street
Meet the team

The default position

If you do not have a Partnership Agreement in place, your business will be governed by the general provisions of the Partnership Act 1890. More often than not, these default provisions will not be desirable for you or your business.

Some examples of provisions contained in the Act are listed below:

  • It is not possible to expel a partner from the partnership, the only option being to end the partnership.
  • The acts and decisions of all partners are binding on the firm.
  • All partners are jointly liable for the debts or wrongful acts of another partner acting in the course of business.
  • Outgoing partners may still be liable for partnership debts or obligations even after they have left the partnership.
  • All parties are entitled to share equally the capital and profits of the business and contribute equally to the losses.
  • Every partner may take part in the management of the business.
  • All partners may have an equal say in the business which can lead to lengthy unresolved disputes.
  • Any partner can bring a partnership to an end by giving notice at any time.
  • The partnership automatically dissolves if any partner dies.

If these default provisions are unsuitable for you (which in most cases they will be) it is vital that you have a written Partnership Agreement setting out the terms that have been agreed between you and the other partners.

Your Partnership Agreement

Your Partnership Agreement can be drafted at any time – it does not matter if you have already been in business for some time.

We will be able to help tailor your Partnership Agreement to meet the needs of you and your business.

Some of the most common issues addressed are:

  • The amount of capital contributed by each partner.
  • What to do if a further capital contribution is required.
  • H ow profits and losses are distributed between the partners.
  • The duties and powers of each partner – who can make decisions? What is expected of each partner? Do they have to devote a certain amount of time to the business? Are there any restrictions on what they can do outside the partnership?
  • How often are meetings held and who can vote at meetings.
  • Employment issues such as holiday, benefits, maternity leave and so on.
  • Whether somebody new can join the partnership and if so, how they go about doing so.
  • What happens if one of the partners wants to leave the partnership or if one of the partners dies?
  • What happens if the partners disagree on an issue?
  • Are there any restrictions imposed on the parties in respect of confidentiality?

Do you need a Partnership Agreement even if your partners are family members?

Yes. Many family run businesses consider it unnecessary to have a Partnership Agreement when they know and trust the people they are in partnership with so well. In fact, it is on these such occasions when it really is crucial that a Partnership Agreement is in place.

The last thing a family wants is discord between family members caused by disagreements regarding work or money. A Partnership Agreement can minimise the potential for conflict and the resentment and family problems it may create.

If you require a Partnership Agreement or have any further questions to ask about partnerships, then do not hesitate to contact Marina Maclennan on 0117 929 2811.

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