Informal Partnership Agreement Template for England and Wales

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Key Requirements PROMPT example:

Informal Partnership Agreement

"I need an Informal Partnership Agreement for a small design studio I'm starting with two other graphic designers in London, with equal profit sharing and a clause specifying that we'll review the partnership terms in January 2025."

Document background
The Informal Partnership Agreement is essential for businesses where two or more individuals wish to collaborate without establishing a formal company structure. This document, governed by English and Welsh law, sets out the fundamental aspects of the partnership including capital contributions, profit sharing, management responsibilities, and decision-making processes. It provides clarity and legal protection while maintaining flexibility, making it particularly suitable for small businesses and professional practices. The agreement should comply with the Partnership Act 1890 and related legislation.
Suggested Sections

1. Parties: Details of all partners entering the agreement, including full names and addresses

2. Background: Context of the partnership formation and business purpose

3. Definitions: Key terms used throughout the agreement including relevant legislation such as Partnership Act 1890

4. Partnership Business: Description of the business activities and scope

5. Capital Contributions: Details of initial and ongoing capital contributions by partners

6. Profit and Loss Sharing: Agreement on how profits and losses will be distributed

7. Management and Decision Making: Process for business decisions and day-to-day management

8. Duration: Term of the partnership and renewal provisions

Optional Sections

1. Banking Arrangements: Details of partnership bank accounts and signing authority

2. Intellectual Property: Ownership and use of IP within the partnership

3. Non-compete Provisions: Restrictions on partners' other business activities

4. Insurance: Required insurance coverage and minimum requirements

Suggested Schedules

1. Schedule 1: Initial Capital Contributions: Detailed breakdown of each partner's initial contribution

2. Schedule 2: Business Plan: Initial business plan and projections

3. Schedule 3: Partner Responsibilities: Specific roles and duties of each partner

4. Schedule 4: Partnership Assets: List of assets owned by the partnership at formation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses
Industries

Partnership Act 1890: Primary legislation governing partnerships in England and Wales. Defines partnerships, establishes basic rights and obligations of partners, and provides default provisions that apply unless explicitly varied by agreement.

Law of Property Act 1925: Key legislation governing how partnership property is held and managed between partners. Essential for understanding property rights within the partnership structure.

Limited Liability Partnerships Act 2000: While not directly applicable to informal partnerships, provides important context for understanding the distinction between different partnership types in English law.

Civil Partnership Act 2004: May be relevant in cases where partners are also in a civil partnership, affecting the interpretation of their business relationship.

Business Names Act 1985: Governs the naming conventions and requirements for partnerships operating in England and Wales.

Partnership (Accounts) Regulations 2008: Specifies the financial reporting requirements and obligations for partnerships.

Common Law Duties: Includes fiduciary duties and duty of good faith between partners, established through case law and legal precedent.

HMRC Regulations: Tax-related requirements including partnership tax treatment, VAT registration, and self-assessment obligations.

Data Protection Act 2018/UK GDPR: Relevant if the partnership handles personal data, establishing data protection obligations and compliance requirements.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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