Checklist for Operating a Partnership
Checklist of Issues in
Drafting General Partnership
What state will the partnership be formed under?
What will be the name of the partnership?
Does the proposed name conflict with a name of another business or constitute a trademark infringement?
Where will the principal place of business be?
What is the term of the partnership?
What will the "purpose" of the partnership be?
Will a fictitious name statement be necessary?
Who will be the agent for service of process?
What will be the initial capital contributions of the partners?
If the partnership needs additional capital, will the partners be obligated to contribute it? In what proportion? Subject to a cap?
Will there be partners contributing services to the partnership? What are the specific services and time commitments?
Will there be interest paid on capital contributions?
Under what circumstances can capital contributions be withdrawn from the partnership?
Will there be loans made by the partners to the partnership? What are the terms and interest rate?
How are profits and losses allocated among the partners?
When are distributions of profits to be made? Who decides? Are there profits that will be retained in the business and not distributed?
What is the fiscal year of the partnership?
What is the accounting method for the partnership?
How will the business be managed? Will there be a Managing Partner?
What acts will require the majority consent of the partners?
What acts will require the unanimous consent of the partners?
Who is authorized to handle the funds of the partnership?
What outside activities of the partners are freely permitted?
What outside or competitive activities of the partners are restricted?
Is any partner entitled to a salary?
How can new partners be added?
How can existing partners withdraw?
How can existing partners be kicked out of the partnership?
If partners withdraw, what happens to their interest in the partnership?
What happens on the death or disability of a partner?
What happens on a bankruptcy or insolvency of a partner?
What happens in the event of a divorce of a partner's spouse with respect to the partnership interest?
What restrictions are there on the transferability of a partnership interest?
Is there a right of first refusal on transfers of partnership interests?
What circumstances dissolve the partnership?
What circumstances result in termination of the partnership?
On termination of the partnership, how are distributions made?
Is there indemnification by a partners who commits negligence or misconduct resulting in a partnership loss?
Are there spouses that need to consent to the terms of the partnership agreement?
How will partnership disputes be handled? Mediation? Arbitration?
What legal competition limits can be placed on a departing partner?
What kind of buy out right should the partnership or the partners have in the event of the death, withdrawal or expulsion or a partner?