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.