Articles of partnership
Articles of partnership is a voluntary contract between two or among more than two persons to place their capital, labor, and skills, and corporation in business with the understanding that there will be a sharing of the profits and losses between/among partners. Outside of North America, it is normally referred to simply as a partnership agreement.
A partnership agreement is the written and legal agreement between business partners. It is always recommended but not essential for partners to have such an agreement.
Articles of Partnership
There are also multiple sections often included as well in articles of partnership, based on the circumstance:
- Host agreement – includes the granting of one partner the rights to manage and administer the business or a specific department.
- Majority management – includes the authorization of a majority of partners to manage the affairs of the entire partnership. This is particularly common where there are numerous partners.
- Annual account – includes provisions to account for, annually, the property and debts of the business.
- Consistent interest – includes the forbidding of any partner to carry out business unrelated to the partnership. This is usually implied in articles of partnership.
- Misconduct expulsion – includes the allowance of expelling partners who commit gross misconduct or becomes insolvent, bankrupt, etc. This is particularly common where there are numerous partners.
- Resolution of dispute – includes the submission of arguments to arbitration.
- Causes income losses - includes the decline of income if companies losses profit.
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