Articles of Partnership
Encyclopedia
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.
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
is a voluntary contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
between two or among more than two persons to place their capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
, 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.
Common components
There are also multiple sections which are often included as well in articles of partnership, based on the circumstance. These are:- 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 arbitrationArbitrationArbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
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