PARTNERSHIP AGREEMENT
Important notice
This fictional example is an educational general form and is not legal advice or a guarantee of legal effect in every jurisdiction. Partnership status, fiduciary duties, registration, tax treatment, licensing and liability rules differ substantially. Before signing, the partners should obtain advice for the place of business, check any regulated-profession requirements and complete required registrations. A partnership may need witnessed, notarised or separately filed documents.
1. Partners and business
On 1 November 2026, Elena Marisol Varga of 15 Cedar Lane, Leeds LS6 2PW, Thomas William Pike of 88 Orchard Road, York YO10 4QJ, and Aisha Noor Rahman of 3 Willow Mews, Sheffield S10 3BT agree to carry on business as Harbour & Field Studio from 26 King Street, Leeds LS1 2HL. The business provides sustainable interior design, space planning and project coordination to small hospitality businesses. The partners will register any business name and partnership required by applicable law.
2. Contributions and ownership
Elena contributes £30,000 in cash and design equipment valued at £8,000; Thomas contributes £20,000 and project-management software; Aisha contributes £12,000 and branding materials. The partners agree that initial capital accounts are Elena £38,000, Thomas £24,000 and Aisha £18,000. The equipment and materials are transferred for partnership use, but title to an item not expressly transferred remains with its owner. No partner must make further contributions without written unanimous consent.
Profits and losses will be allocated 45 percent to Elena, 30 percent to Thomas and 25 percent to Aisha after approved expenses, tax reserves and agreed drawings. Capital accounts will be updated quarterly. Drawings are advances against profit, not guaranteed salary, and may be suspended if the partners reasonably believe the business cannot meet its debts.
3. Authority and responsibilities
Elena leads design and client relationships, Thomas leads procurement and delivery, and Aisha leads finance and administration. Each partner may enter ordinary contracts up to £10,000 that are within the approved budget. A partner must obtain unanimous written approval before borrowing, granting security, hiring an employee at annual cost above £45,000, buying an asset above £15,000, commencing litigation, changing the business, admitting a partner or signing a contract longer than two years. A partner who exceeds authority must promptly notify the others and is responsible for loss caused by an unauthorised act to the extent the law permits.
The partners must act honestly, keep proper accounts, disclose material conflicts, safeguard client property and comply with health, safety, data-protection, copyright and tax obligations. No partner may secretly take a competing opportunity learned through the partnership. A conflicted partner must disclose the facts and abstain from a decision where appropriate.
4. Banking, records and tax
Partnership money must be held in an account in the partnership name at North Coast Bank, Leeds Central branch. Payments above £5,000 require two authorised approvals. Aisha will maintain invoices, receipts, payroll records, tax documents and a register of partnership assets. Each partner may inspect records on reasonable notice. The financial year ends on 31 March, and the partners will appoint Westgate Accountancy LLP, 2 Wellington Square, Leeds LS1 4DL, to prepare annual accounts unless they unanimously choose another adviser. Each partner remains responsible for personal tax arising from allocations and drawings.
5. Intellectual property and confidentiality
Client deliverables paid for by a client will be supplied according to the client contract. Templates, methods, photographs, designs and software created specifically for the business are partnership assets. A partner retains pre-existing materials but grants the partnership a non-exclusive licence to use them in the business during this agreement. Confidential client information, pricing, supplier terms and financial records may be used only for partnership purposes, subject to professional advice and legally required disclosure. These obligations continue after departure.
6. Admission, withdrawal and incapacity
No new partner may join without a written deed signed by every existing partner that sets out capital, profit share, authority and assumption of liabilities. A partner may retire by giving 90 days' written notice. Death or permanent incapacity is not a breach, but the remaining partners may continue the business and purchase the outgoing interest using a valuation by an independent accountant. The valuation will use a normalised average of the previous three years' profits, adjusted for unusual items, plus the partner's capital account and less undisputed amounts owed.
The purchase price is payable 20 percent on completion and the balance in 18 equal monthly instalments with interest at 3 percent per year, subject to mandatory law. The outgoing partner must return partnership property and cooperate with reasonable client handover. A departing partner must not represent that they remain authorised.
7. Dispute resolution and dissolution
The partners will first meet within ten business days after written notice of a dispute. If unresolved after 20 business days, they will attempt mediation in Leeds for 30 days. This does not prevent urgent protective relief. The partnership may be dissolved by unanimous agreement, insolvency, illegality, or an order required by law. On dissolution, the partners will complete client work where practicable, collect debts, sell assets, pay creditors and return loans. Remaining money will be applied to capital accounts and then divided in the profit shares, subject to final accounts and law.
8. Governing law and execution
This agreement is governed by the law applicable in England and Wales, with the courts there having non-exclusive jurisdiction. Any mandatory rule that cannot be varied prevails. Legal advice should confirm whether a partnership deed, registration, witness or special tax election is required. The partners sign intending to be legally bound.
Signatures
Elena Marisol Varga Signature: ____________________ Date: 1 November 2026
Thomas William Pike Signature: ____________________ Date: 1 November 2026
Aisha Noor Rahman Signature: ____________________ Date: 1 November 2026
Witness: Grace Olivia Sutton, 41 Moor View, Leeds LS7 1AB Signature: ____________________ Date: 1 November 2026