A partnership agreement is an agreement which sets out the terms of a partnership. Absent a partnership agreement, the terms of the partnership are governed by the Partnerships Act, the common law and, if applicable, the Limited Partnerships Act. A partnership agreement is almost always desirable to modify the default provisions of the Partnerships Act. These provisions include:

• all partners are entitled to share equally in the capital and profits of the partnership business and must contribute equally towards the losses;
• the partnership must indemnify partners for personal liabilities incurred in the ordinary course of the partnership business or for the preservation of the business or partnership property;
• every partner may take part in the management of the partnership business;
• no partner is entitled to remuneration for acting in the partnership business (over and above their share of the profits);
• no new partner may be admitted without the consent of all partners;
• ordinary matters are decided by a majority of the partners, but a change to the nature of the partnership business requires the consent of all existing partners;
• a partner must account to the other partners for all profits from a competing business carried on by the partner without the consent of the other partners; and
• the partnership is terminated by notice from a partner or on the death or insolvency of a partner.

A partnership agreement will therefore deal with the following matters:

• the formation of the partnership, its name and scope of its business;
• restrictions on carrying on a competing business
• the admission, retirement, withdrawal and expulsion of partners;
• the capital contributions of partners;
• the distribution of profits;
• the management of the partnership;
• the death or disability of a partner;
• dispute resolution.

At Burshtein Law, we have experience advising partnerships, during various stages, as well as drafting and reviewing partnership agreements. We have experience working with partnerships in the areas of law, consulting and real estate.