Some Considerations for General Partnership Agreements

Whether it is a partnership for a flush cow, a boar or a bull that is in a stud, or a family-owned agriculture enterprise, you are encouraged to get a partnership agreement in writing.  Even if you are going into business with someone you know and trust, a handshake won’t protect you if unexpected things go wrong.  Each state has “default rules” for partnerships when there is not a written agreement or the agreement is silent on certain terms.  To avoid surprises, agriculture producers should get the terms of the agreement in writing so a court will enforce the terms of the partnership that you decided on.

You are encouraged to hire a professional but if you choose to draft the agreement yourself consider including the following provisions:

1.  Names and addresses of the partners;

2.  Name of the partnership;

3.  Purpose of the partnership;

4.  Term of the partnership;

5.  Initial contribution of the partners;

6.  Additional contribution requirements;

7.  Assets of the partnership;

8.  Allocation and distribution of profits and losses;

9.  Duties of partners;

10.  Expenses of partnership;

11.  Management and control of business;

12.  Effect of a default;

13.  Amendments to partnership agreement;

14.  Effect of partner’s death or incapacity;

15.  Assignability of ownership interest;

16.  Arbitration, mediation, and/or forum selection clause; and

17.  Dissolution and winding up of the partnership.

As always, partnership law is state specific so if you are considering drafting a partnership agreement, make sure you consult an attorney licensed in your jurisdiction.