“Sharing is caring” is a well-known saying and it does mean as well. Business is an old way of earning and is pretty efficient as well. Usually it is not owned and run by only one person; instead it is more than one and sometimes a lot of people as in today’s business world. People become partners in the business, invest together and hence share the profit and loss on the basis of their investments. Partners have equal rights and responsibilities in the business and share the load of business in one way or the other.
Today nothing is done verbally since the world has advanced too much and so have the crimes and frauds of criminal minds. To be on the safe side proper paper work is done especially in the matters related to trade and business so that no one can cheat and do fraud with anyone or face the consequences from the law since there will be paper work, a proof of everything. Same goes for the case of investment and becoming partners. People invest with each other and partnership contracts are signed among the parties so that no one’s rights can be violated and the investment is safe.
Here is preview of this Free Sample Partnership Contract Template created using MS Word,
A partnership contract is usually signed between two persons, between two companies and also sometimes among a company and an investor. No matter what is the scenario, it is really important to have these documents created and taken care of since these matters are sensitive and can lead to serious financial hazards and losses if one is ignoring them.
A partnership contract usually states the name of both the parties at the starting in form of a statement. It states that one is sharing the ownership rights by a specified percentage to the other, with the names of both mentioned in the correct order. The date and time is very necessary to be mentioned in these contracts for reference in the future. By signing a partnership contract one agrees to have a share in not only the ownership but also the profit and loss, which the business might fruit. After stating the base of the contract, the terms, which are applicable to both parties, are stated; to which both will be bound to follow at every cost. No one is allowed to violate any clause of the contract until permissible by the other party.
First the responsibilities of owner or first party are mentioned, which majorly comprises of transfer of a percentage of ownership rights to the other party. This is the main concern of the partnership contract. Any other terms which might be applicable to that business are included like training of any kind which is necessary for the new investor and so on.
Afterwards the responsibilities of investor or second party are included. This majorly includes that they recognize their rights and respect the responsibilities, which will be applicable from now regarding this business. Any other terms and conditions related to profit and loss and or investment policies are also included for avoiding any misunderstandings.