What is a partnership?

Partnerships are a specific type of business structure that arises when parties come together in a business venture for the purpose of making a profit. A business partnership does not have to be formally documented to be considered a partnership under the Victorian Partnership Act 1958.

It is important to understand how a partnership is formed and that when forming a partnership that you have the correct legal advice from a commercial lawyer who understands these entities.

As with any business there can be liabilities and issues that arise. A properly drafted Partnership Agreement will protect you and your business partners. Giving proper consideration to what the relationship is and what the business the partnership will be conducting is essential to getting the right partnership agreement in place.

A partnership agreement will formally set out the following sorts of issues:

• Who the Partners are
• Contributions or investment from partners
• Profit distribution
• How assets of the partnership are dealt with
• Rights of the Partners
• Intellectual Property Ownership issues
• Termination of the partnership
• Process to deal with events such as insolvency, death, criminal convictions, conduct of the Partners
• Liability of the Partners
• Mediation and dispute resolution

Well drafted agreements are most powerful when disputes arise and can save you time and stress later having these issues thought through. Having the right partnership agreement drafted will ultimately work to reduce issues from arising and provide a clear framework for how they are dealt with if they do.

Partnership disputes can be costly and spell the end of your commercial venture. Having good documentation will act as an insurance policy to prevent disputes from arising.

Partnership lawyers will be able to advise you of the risks associated with this type of business arrangement.

We provide extensive legal advice to SME businesses across Melbourne. We can assist you in providing clear concise and commercially minded legal advice.

To speak to a lawyer regarding your partnership agreements call us on 1300 907 335 or complete an online enquiry form and we will be in contact with you promptly.