PARTNERSHIPS: A PARTNERSHIP AGREEMENT
Study Unit
PARTNERSHIPS: A PARTNERSHIP AGREEMENT ~29 min
(2) INTRODUCTION TO THE PARTNERSHIP BUSINESS 2.1 Name and Place of Business The Partnership shall be called ‘Paws to Unwind’ and/or such other name or names as the Partners unanimously may from time to time agree upon in writing and its principal place of business shall be 15 Bridge Place, Cambridge, CB5 2TX unless changed by unanimous consent, and if amended will be at such place or places the Partners shall hereafter determine.
2.2 Incoming Partners The Partners may admit a new Partner in accordance with clause 6.1. No person may become a Partner until he or she has agreed in writing, and this is approved unanimously by the Partners and the incoming Partner has agreed to be a party to this agreement and be bound by its terms.
2.3 Effective Date and Term Notwithstanding the date of execution hereof, this Agreement shall be effective as of and from the date the partners have agreed to commence the partnership and will continue indefinitely or until mutual consent to dissolve the business in accordance with s.18 herein. The partners hereby agree that this agreement wholly supersedes all earlier partnership agreements and each of the Partners mutually discharges the others from all claims, demands, actions and proceedings in respect of such agreements or arrangements.
(3) DISPUTES 3.1 Where there is a dispute between the partners, then after 28 days from and including the date the dispute has arisen, the matter may be referred to and finally resolved by arbitration under the Rules of the London Court of International Arbitration, which Rules are deemed to be incorporated by reference into this clause.
3.2 This clause shall be without prejudice to the rights of any party to seek any injunctive or similar relief to protect its intellectual property rights or other rights of any description.
(4) PARTNERSHIP FINANCES 4.1 Profits and Losses At the end of each Fiscal Year all items of income and gain, and expense and loss of the Partnership shall be determined by the Accountants of the Partnership and subject to the provisions of this Agreement, the net profits, if any, of the Partnership as determined at the end of each Fiscal Year, shall be allocated among the Partners in proportion to their respective capital unless agreed otherwise by unanimous agreement of the Partners. All expenses incurred in the course of the Business and all losses, if any arising therefrom shall be borne out of the earnings of the Business.
4.2 Drawings Subject to clause 3.10 on the first day of each month, or the next Business Day, each of the Partners may draw on account of his or her share of profits, for the then Accounting Period a sum not exceeding one-twelfth of the share of Net Profits of such Partner the amount being that which is detailed in the last set of partnership business Audited Accounts. Any sums drawn out by any Partner in excess of its share of the net profits for any such year shall be repaid forthwith in full to the Partnership falling due the day after the Audited Accounts for the accounting period are finalized unless otherwise unanimously agreed.
Read A and B opposite and match the following phrases from the agreement with the definitions below. 1. ‘unanimously may from time to time agree upon’ 2. ‘shall hereafter determine’ 3. ‘Notwithstanding the date of execution hereof’ 4. ‘shall be effective as of and from the date’ 5. ‘wholly supersedes all earlier partnership agreements’ 6. ‘each of the Partners mutually discharges the others’ 7. ‘which Rules are deemed to be incorporated by reference’ 8. ‘without prejudice to the rights of any party’
(a) completely replaces and cancels the legal effect of any previous agreements (b) will decide at some time after this agreement is signed (c) makes a reciprocal promise to release or free the others (d) will not have any legal effect on; will not cancel or change that right (e) may do this more than once during the term of this agreement if every partner agrees to it (f) will come into force and take legal effect starting on this date and continuing after that (g) they are included and incorporated into this agreement by mentioning them (h) regardless of the date on which this agreement is signed
Refer back to A and B opposite and answer the following questions. 1. What is required if the partners decide that they want to perform the majority of their business
at a new location? 2. In what form does a partner have to give his or her agreement to being admitted as a new partner prior to becoming a party to the partnership agreement? 3. How long will the partnership last if every partner does not give his or her consent to dissolve it in accordance with the terms set out in the agreement? 4. Which words in the agreement state that the partners agree not to sue each other for any breach of any previous agreement? 5. If there is a dispute between the partners and one of them wishes to refer the matter to arbitration, he or she must wait a period of 28 days. When does time start to run on the 28-day period? 6. Which clause states that the partners, despite anything set out in the agreement about arbitration, retain the right to go to court to protect his or her personal rights?
Read C opposite and write a brief email to a client using the information you have read. Your client, Jodie Freeman, has been invited to join a partnership which offers pet care services and is currently run by her two friends, Deidre Price and Alex Wood. Jodie has been asked to become a party to this agreement and has sent you the email below. When you answer Jodie include the following: • Explain what net profits are and what proportion of the net profits she can expect to receive. • Explain when she will be entitled to withdraw her share of the profits and what her monthly limit
is on making a withdrawal. • Explain what she is obliged to do if she exceeds the withdrawal limit.
Hi Taylor I’ve been invited to become a partner in a business with two of my friends and I don’t understand s.4.1 and s.4.2. They seem to be the most important sections of the contract because they deal with the financial side of things. I’m hoping you can shed some light on this agreement for me. I look forward to hearing from you. Kind regards Jodie
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.