Partnership agreement template for two or more business partners
Starting a business with a friend works best when you agree on the hard questions before money is on the line. This prompt has your todo.is agent draft a partnership agreement covering who puts in what, how profits are split, who decides what, and what happens if a partner wants out, plus a list of questions to settle together first.
The prompt
- Draft a partnership agreement for [BUSINESS NAME AND WHAT IT DOES], between these partners: [PARTNER NAMES]. Contributions: [WHO PUTS IN WHAT]. Ownership and profit split: [PERCENTAGES]. Roles: [EACH PARTNER'S ROLE AND TIME COMMITMENT]. Include: purpose and name, capital contributions and future funding, profit and loss sharing, draws and salaries, management and voting (which decisions need everyone's approval), bank accounts and spending limits, new partners, a partner leaving, death or disability, buy-sell terms and how the business is valued, non-compete and confidentiality, dispute resolution with mediation first, dissolution, and signatures. Governing law: [STATE OR COUNTRY]. Save it as a Word file and give me a list of 10 questions we should agree on before signing.
What to change
- [BUSINESS NAME AND WHAT IT DOES]: e.g. "Saltline Studio, a video production company".
- [PARTNER NAMES]: Full names of all partners, e.g. "Omar Haddad and Lena Brooks".
- [WHO PUTS IN WHAT]: Cash, equipment, clients or work, e.g. "Omar $20,000 cash, Lena camera equipment worth $8,000".
- [PERCENTAGES]: e.g. "50/50" or "60/40". Ownership and profit can differ if you want.
- [EACH PARTNER'S ROLE AND TIME COMMITMENT]: e.g. "Omar runs sales full-time, Lena runs production 30 hours a week".
- [STATE OR COUNTRY]: Where the business is registered, e.g. "Illinois, USA".
Example result
- General Partnership Agreement (sample draft)
- Partners: Omar Haddad and Lena Brooks. Business: Saltline Studio, video production.
- 1. Contributions. Omar contributes $20,000 cash. Lena contributes camera and lighting equipment valued at $8,000 and $12,000 in cash. Contributions earn no interest.
- 2. Ownership and profits. 50/50. Net profits and losses are shared equally and calculated each quarter.
- 3. Draws. Each partner may draw up to an agreed monthly amount. Larger draws need both partners' approval.
- 4. Roles. Omar leads sales and client relations full-time. Lena leads production at least 30 hours per week.
- 5. Decisions. Day-to-day decisions: either partner. Unanimous approval needed for: spending over $2,500, taking on debt, hiring, signing contracts over 6 months, adding a partner, or selling the business.
- 6. Banking. One business account. Both partners can view it at all times.
- 7. Leaving the partnership. A partner gives 90 days' written notice. The remaining partner may buy their share at fair value.
- 8. Valuation. Fair value is agreed by both partners or, if they cannot agree, set by an independent valuer they choose together.
- 9. Death or disability. The remaining partner may buy the share from the estate on the same valuation terms, paid over up to 24 months.
- 10. Confidentiality and non-compete. Partners keep business information private and do not compete in the same local market during the partnership and for a limited period after, where local law allows.
- 11. Disputes. Partners first try to settle in good faith, then mediation, then the courts of Illinois.
- 12. Dissolution. Debts are paid first, then capital is returned, then remaining assets are split by ownership.
- Questions to agree on first (extract)
- • What happens if one partner stops putting in the hours?
- • Can either partner take side projects?
- • Who owns the client list and brand if you split?
- • Should you form an LLC instead of a general partnership?
How to do it with todo.is
- Copy the prompt and fill in the partners, contributions, split and roles.
- Paste it into todo.is on the Today screen or send it to your agent on Telegram or WhatsApp.
- Your agent writes the agreement as a Word file plus the list of questions to settle together.
- Talk through the questions with your partner, then ask your agent to update the clauses, for example "add vesting over 4 years".
Tips for a better result
- Write down what happens when someone leaves. Exit terms are the clause partners most often wish they had agreed early.
- Set a spending limit for single decisions. It stops arguments over who approved what.
- Agree on how the business is valued before anyone wants out, not after.
- In a general partnership, partners can be personally liable for business debts. Ask a lawyer or accountant whether an LLC or company suits you better.
- This is a draft, not legal advice. Each partner should ideally have a lawyer review it for your state or country.
partnership agreement template: FAQ
- Do we need a partnership agreement if we are friends? Yes, arguably more so. Without one, default local rules decide profit splits and exits, which rarely match what friends assume.
- Is a partnership agreement the same as an LLC operating agreement? They cover similar topics, but an operating agreement is for an LLC, which is a separate legal entity. A partnership agreement is for a partnership. Ask your agent for an operating agreement draft if you form an LLC.
- Can ownership differ from profit split? Yes. Partners can agree, for example, on 50/50 ownership but pay a working partner a salary or guaranteed payment first. Write it down clearly.
- Does todo.is register the partnership for me? No. Your agent drafts the agreement and can look up how registration works in your area with links, but you file it yourself.
JavaScript is required to use the todo.is app.