Partnership agreement template
Two people starting a business together agree on everything in the first month. A partnership agreement records those agreements for the month, years later, when one wants out, one is doing most of the work, or the business needs money. This template sets out contributions, ownership, how profits are split, who decides what, and how a partner leaves. Read it below, then send it to your partner to sign.
Updated November 5, 2026 · 3 min read
The contract
Gray blanks are yours to fill in before you send. Each signer fills in the blanks in their color.
- You, before sending
- Partner 1
- Partner 2
Partnership Agreement
This Partnership Agreement (the "Agreement") is made on Agreement date between Partner 1 name and Partner 2 name (each a "Partner"), who agree to carry on a business together as a general partnership on these terms.
1. Name, purpose and place of business
The partnership's name is Partnership name (the "Partnership"). Its purpose is Business purpose. Its main place of business is Business address, and it began or will begin business on Start date.
2. Contributions
- Partner 1 contributes: Partner 1 contribution.
- Partner 2 contributes: Partner 2 contribution.
Property contributed is valued as stated above. No Partner must contribute more unless all Partners agree in writing. Contributions earn no interest, and the Partnership keeps a capital account for each Partner showing contributions, shares of profit and loss, and distributions.
3. Ownership and profits
Partner 1 owns Partner 1 percentage and Partner 2 owns Partner 2 percentage of the Partnership. Profits and losses are shared in the same percentages. Profits are distributed Distribution schedule, after setting aside enough to pay the Partnership's expenses, debts and a reserve the Partners agree on, and enough for each Partner's estimated taxes on their share.
4. Draws and guaranteed payments
Partners may take draws against their expected share of profits as follows: Draw arrangement. Draws are deducted from the Partner's share when profits are distributed. A Partner who manages the business full time receives this guaranteed payment, if any: Guaranteed payments.
5. Management and decisions
Each Partner has an equal say in management and may make day-to-day decisions within their own area: Areas of responsibility. These decisions need the written agreement of every Partner: borrowing money or spending more than Spending limit at once; signing a lease or any contract longer than one year; selling a major asset; admitting a new partner; changing the business's purpose; or giving a personal guarantee in the Partnership's name. If the Partners can't agree, they will ask Tiebreaker or adviser to help them decide before using section 10.
6. Bank accounts and records
The Partnership keeps its money in its own bank account, separate from the Partners' personal accounts. Any payment over Two-signature limit needs the approval of both Partners. Complete books are kept at the main place of business, every Partner may inspect them at any time, and the Partnership's tax return is prepared each year by an accountant the Partners choose.
7. Time and loyalty
Each Partner will devote this time to the business: Time commitment. While a Partner, no Partner will run or work for a competing business. Business opportunities that come to a Partner in the Partnership's line of business belong to the Partnership first.
8. A Partner leaving
A Partner may withdraw by giving Days' notice to withdraw days' written notice. If a Partner withdraws, dies or becomes permanently unable to work in the business, the remaining Partner may buy the departing Partner's share, or that Partner's estate's share, at the value set under section 9, and continue the business. If the remaining Partner doesn't buy within 90 days, the Partnership is dissolved under section 11.
9. Value and payment of a share
A departing Partner's share is valued by this method: Valuation method. The price is paid over Months to pay a buyout months in equal monthly payments, starting one month after the value is set.
10. Disputes
The Partners will try to resolve any dispute by talking it through. If that fails within 30 days, they will try mediation with a mediator they choose together before either goes to court.
11. Dissolution and changes
If the Partnership is dissolved, the Partners will wind it up by collecting what is owed, selling assets as needed, paying its debts, returning each Partner's capital account balance, and dividing anything left in their ownership percentages. This Agreement can be changed only in writing signed by every Partner.
12. General
This Agreement is governed by the laws of the state of State. It is the entire agreement between the Partners about the Partnership and replaces earlier discussions. Electronic signatures count as originals and may be signed in counterparts.
Partners' addresses
Partner 1: Partner 1 address
Partner 2: Partner 2 address
Partner 1: I have read this Agreement, including what happens when a Partner leaves (sections 8 and 9).
Partner 2: I have read this Agreement, including what happens when a Partner leaves (sections 8 and 9).
Partner 1
Partner 2
Opens it in SignMaster as a template you can edit and send.
A starting point, not legal advice. Have a lawyer review it for your state and situation.
On this page
What happens without one
Two people who go into business for profit together form a general partnership, whether or not they sign anything. Without an agreement, the state's partnership law fills in the gaps, and most states follow the Revised Uniform Partnership Act. Its defaults can surprise people: profits split equally no matter who put in more money, any partner can bind the business in ordinary matters, and each partner is personally liable for the partnership's debts. A written agreement can change the first two. It can't change the third, which is why many partners form an LLC instead.
What the template covers
- The business: its name, purpose, main address and start date.
- Contributions: what each partner puts in, in cash, equipment or work, and whether more can be required.
- Ownership and profit split: each partner's percentage, and how profits and losses are shared.
- Draws and pay: how and when partners take money out, and whether anyone gets a guaranteed payment for running the business.
- Decisions: what one partner can do alone, and what needs everyone, such as borrowing above a set amount or adding a partner.
- Time and loyalty: the hours each partner commits, and no competing business on the side.
- Leaving, death and disability: a buyout right, a valuation method and a payment schedule.
- Disputes and dissolution: mediation first, then how assets are sold and debts paid if the business closes.
Mistakes partners regret
- Splitting 50/50 with no tiebreaker. Name how a deadlock is broken, such as a trusted adviser or mediation.
- Counting "sweat equity" without a value. If one partner contributes work instead of cash, write down what it's worth.
- No buyout formula. The day a partner leaves is the worst day to agree on what the business is worth.
- One partner with the only login to the bank. Require two signatures above an amount you name.
- Forgetting taxes. A partnership files its own return and each partner reports their share, so plan cash for the tax bill.
Considering an LLC instead?
An LLC gives owners limited liability for business debts, which a general partnership doesn't. The terms are similar, but they live in an LLC operating agreement. Talk to an accountant about which suits your taxes.
How to send it with SignMaster
- 1
Open the agreement
Choose Use this template. It's set up for two partners who both sign. For three or more partners, copy the text from the preview above into your own document, add the extra partners to sections 2 and 3, and upload it as a new template.
- 2
Agree the numbers first
Talk through contributions, percentages and the buyout formula, then type them into the gray blanks. The blanks print exactly as typed, so write "60%" rather than "most".
- 3
Send it to every partner
Add each partner's name and email, and set them to sign at the same time rather than in order. Each partner fills in their own address and ticks that they've read the buyout section before signing.
- 4
Keep the signed copy safe
When the last partner signs, everyone gets the PDF with a certificate of completion. The PDF carries a SHA-256 fingerprint, so if anyone edits it later, the change can be detected. Store it with the bank paperwork.
Changing the agreement later
Partnerships change: a new partner joins, or the split moves to reflect who does the work. Section 11 requires changes in writing signed by every partner. Write a one-page amendment that refers to this agreement by date, send it to all partners in one envelope, and keep it with the original. The amendment guide explains the difference between amending and replacing a contract.
Questions? Answers.
Do we need a written partnership agreement?
It's not required to form a general partnership, but without one your state's default rules decide profit splits, decisions and buyouts. Most of those defaults won't match what you agreed.
Does a partnership agreement limit personal liability?
No. In a general partnership each partner can be personally liable for business debts. For limited liability, form an LLC and sign an operating agreement.
How are partnerships taxed?
A partnership files an information return, Form 1065, and each partner reports their share of profit or loss on their own return using a Schedule K-1. Ask an accountant how it applies to you.
Can partners in different cities sign it online?
Yes. Each partner gets their own link by email and signs on any phone or computer. Signing at the same time means nobody waits for anyone else.