What to Include in a Business Partnership Agreement

 Posted on May 27, 2025 in Business Formation

At the start of any business venture, business partners are likely to be excited to get started and feel motivated to work well together. While the focus is and should be on building the business — registering the company, building the product or service, bringing in clients, hiring personnel, and all the other tasks that occupy an early-stage business — it is also vital to protect yourself and the company with a strong partnership agreement that outlines the partners’ rights and responsibilities. Doing so will provide a framework for resolving disputes should they arise in the future. It can also encourage business growth as the parties go into the venture with full transparency, understanding the ownership terms of the partnership, and knowing that the contract provides strong legal protections to reduce potential conflict. An experienced Fort Worth, TX business formation attorney can help draft your partnership agreement.

Top Terms You Should Include in a Business Partnership Agreement

Percentage of Ownership

The partnership agreement should detail each partner’s ownership stake in the business. This section may also address the partners’ initial and potential future financial contributions to the venture, as well as how profits and losses will be divided, which may be done according to ownership percentage or using a different agreed-upon method. The partnership contract should also outline when partners can withdraw profits from the partnership. 

Decision-Making

This section can help reduce conflict by laying out the decision-making process in the partnership from the start. It not only defines clear roles but also minimizes the risk that one partner will have to bear liability for the decisions of another partner. 

Perhaps one partner will be responsible for decision-making in a certain area, such as marketing, while the other partner will focus on employee management, or maybe both partners will make all decisions jointly. Whatever the case, this section should also outline partner roles and responsibilities, and who gets the final say on a decision.  

Adding or Subtracting Partners

As the business grows or changes, you may wish to add another partner. For example, you may meet an individual who has connections that can bring in many clients to the business and may wish to include them in the venture as a partner. The partnership agreement should outline the voting process for adding or removing a partner. It should also list the reasons a partner can be terminated and the process for doing so.

Call a Fort Worth, TX Business Formation Attorney

As exciting as it is to begin a new business venture, no business can go far without legal protections. A cornerstone of a thriving business partnership is a strong partnership agreement. If you are ready to start negotiating and drafting your business partnership agreement, reach out to the experienced Fort Worth, TX business formation lawyer at Gonzalez Law, PLLC. Our office provides complimentary consultations and can be reached at 817-349-7330.