BUSINESS PARTNERSHIP AGREEMENT
(England and Wales - General Partnership under the Partnership Act 1890)
This Business Partnership Agreement (this "Agreement") is made on [effective date] (the "Effective Date") between:
(a) [legal name of partner 1], an individual residing at [address of partner 1];
(b) [legal name of partner 2], an individual residing at [address of partner 2]; and
(c) any further person admitted as a partner and listed in Schedule 1 (Key Commercial Terms),
each individually a "Partner" and together the "Partners".
BACKGROUND
(A) The Partners wish to associate as co-owners to carry on the business described in Clause 3 in common with a view of profit, and to govern that association in writing on the terms of this Agreement.
(B) The Partners intend to form a general partnership governed by the Partnership Act 1890 and the laws of England and Wales, and to be treated as a partnership for the purposes of UK income tax (Part 9 of the Income Tax (Trading and Other Income) Act 2005, "ITTOIA 2005") and capital gains tax.
(C) The Partners wish to record their respective contributions, profit shares, management rights, and obligations in this Agreement.
It is agreed:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, the following capitalised terms have the meanings set out below. Other capitalised terms are defined where they first appear.
(a) "Business" means the business described in Clause 3 and any further business activities the Partners agree in writing to carry on under this Agreement.
(b) "Business Day" means any day other than a Saturday, Sunday, or public holiday in England and Wales when banks in London are open for business.
(c) "Capital Account" means the account maintained for each Partner under Clause 4.6 recording that Partner's contributions to and withdrawals of capital.
(d) "Confidential Information" has the meaning given in Clause 9.1.
(e) "Current Account" means the account maintained for each Partner under Clause 4.7 recording that Partner's allocated profits, drawings, and other current entries.
(f) "Data Protection Laws" means the UK GDPR, the Data Protection Act 2018, the Privacy and Electronic Communications Regulations 2003, and any legislation replacing or supplementing them.
(g) "Goodwill" means the goodwill of the Business, including customer relationships, reputation and other intangible value attaching to the Business.
(h) "Major Decision" has the meaning given in Clause 7.3.
(i) "Partnership" means the general partnership formed under this Agreement and operating under the name [partnership name].
(j) "Partnership Act" means the Partnership Act 1890.
(k) "Partnership Property" means all property, rights, and interests treated as partnership property under section 20 of the Partnership Act, including all property contributed to or acquired by the Partnership for the purposes of the Business.
(l) "Partnership Share" means a Partner's interest in the Partnership, including that Partner's share of capital, profits, losses, and voting rights.
(m) "Outgoing Partner" has the meaning given in Clause 12.4.
(n) "Work Product" has the meaning given in Clause 10.1.
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About this template
What is this template?
This document is a general partnership agreement for England and Wales that displaces several default rules of the Partnership Act 1890. It is NOT a Limited Liability Partnership (LLP) agreement and does not provide limited liability for the partners. It contains specific UK tax language regarding fiscal transparency and ITTOIA 2005 compliance.
When should you use it?
Use this document when two or more people are starting a business together in the UK without incorporating a company or an LLP. Use an LLP Agreement instead if you want to limit the personal liability of the partners for business debts.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 2 | Formation and Name | Establishes a general partnership under the Partnership Act 1890 and requires compliance with business names disclosure under the Companies Act 2006. |
| 4.1 | Capital Contributions | Obliges each Partner to make Initial Contributions by the [initial contribution deadline] specified in Schedule 1. |
| 7.3 | Major Decisions | Requires a specific [major decision approval threshold] percentage for actions like borrowing money or admitting a new Partner. |
| 8.2 | Fiduciary Duties | Incorporates the statutory duties from sections 28 to 30 of the Partnership Act 1890 regarding true accounts and non-competition. |
| 10.2 | Intellectual Property | Assigns all Work Product created by a Partner in connection with the Business to the Partnership with full title guarantee. |
| 11.2 | Non-Compete | Restricts an Outgoing Partner from competing within a defined [non-compete geographic area] for a period specified in Schedule 1. |
| 12.2 | Expulsion | Permits the expulsion of a Partner for fraud or material breach not remedied within a [cure period] after notice. |
| 12.6 | Buyout of Outgoing Partner | Obliges the Partnership to purchase an Outgoing Partner's share based on Capital and Current Account balances at the Leaving Date. |
Who it's for
- individuals forming a general partnership under the laws of England and Wales
- business owners requiring a buyout mechanism to prevent dissolution on partner exit
- partners needing to define different management authorities (Option A, B, or C)
- UK businesses requiring intellectual property assignments from partners to the partnership
How long it runs and how it's signed
Law it's drafted under
England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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