Partnership agreement template
Two people in business together often have an arrangement long before they have a document. goHeather asks what you actually agreed, writes it down, and raises the questions partners usually postpone until they cannot.
Any country or jurisdiction you tell it- Capital, profit and voting set separately
- Authority limits, so one partner cannot commit everyone
- Exit, death and deadlock asked up front
Recognized by
What is a Partnership Agreement?
An arrangement that often exists before the document does
A partnership frequently comes about simply because two or more people started running a business together. There is an arrangement, an understanding about who does what and who gets what, and often nothing written down.A partnership agreement records it. It sets out what each partner contributed, how profits are shared, who can commit the firm to what, how decisions get made, what each partner is expected to do, and how somebody leaves.Where there is no agreement, a set of default rules applies instead. They tend to be blunt — an even split regardless of what anyone put in, equal say regardless of investment — and they are rarely what the partners had in mind.
What often goes wrong in a partnership agreement
Patterns that come up again and again, and how goHeather handles them.
A handshake and good intentions
- Nothing written down, so a default set of rules applies instead
- Every partner able to commit the firm to any amount
- No stated time commitment, so contributions diverge and resentment follows
- Terms under which one partner leaving would close the business
- Nothing covering death or divorce, so a share could pass to someone outside the firm
Building it with goHeather
- Capital, profit share and voting are set separately and on purpose
- Authority thresholds say what one partner can commit the firm to alone
- Expected time commitment and outside activity are written down
- A continuation provision keeps the business running when a partner leaves
- Death, illness, divorce and deadlock each get an answer up front
From blank page to signed partnership agreement
goHeather is not a template download. It is a contract builder that walks you through the document, powered by the latest AI models.
- Start
Start from scratch or from a template
Describe the deal in your own words, or pick a Partnership Agreement template and work from there. Either way goHeather builds the document with you rather than handing you a file to fill in.
- Answer
Answer questions as it drafts
goHeather asks who the parties are, what the deal covers and where you operate, and writes each clause around your answers as you go.
- Review
See every clause explained
Each clause comes with a plain-English summary of what it does, so you know what the document says before you send it.
- Negotiate
Check what comes back
Upload the other side’s edits and goHeather shows each change against the version you sent, flagged by risk.
- Sign
Send it for signature
Collect e-signatures and keep the executed copy, the key dates and the renewal terms in one place.
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Who needs a Partnership Agreement
Where this document usually shows up, and what else goHeather covers there.
- Founders
Going into business together
The conversation about splits, roles and exits is easiest at the start and hardest at the moment you need the answer.
See contract AI for founders
- Professional services
Professional firms and practices
Practices have their own conventions on draws, capital and retirement. goHeather asks rather than assuming.
See contract AI for professional services - Related
Would an LLC suit better?
Many new businesses use an LLC instead. The equivalent internal document is an operating agreement.
See the LLC operating agreement template - Finance
Draws, capital accounts and money out
How and when money reaches the partners is the question the agreement has to answer most precisely.
See contract AI for finance teams
Your contracts stay yours
A Partnership Agreement carries names, numbers and terms you would not want shared. goHeather protects every document you draft or upload with enterprise-grade controls, end-to-end encryption and trusted AI providers.
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Contracts encrypted with gold-standard protection- Database provider meets bank-grade security
- Your documents and data will never be sold
- We do not use your data to train our models
Building a partnership agreement with goHeather
goHeather is a technology company, not a law firm, and this page is not legal advice. It describes what our software does. Nothing here states the law or tells you what your contract needs — for that, talk to an attorney licensed where you operate.
The expensive thing about partnerships is how easily they start without a document. The sections below cover the questions goHeather puts to you, why three separate numbers get confused for one, and the two provisions that decide whether a firm survives a partner leaving.
What goHeather covers in a Partnership Agreement
These are the parts of a Partnership Agreement goHeather asks you about while it builds one, and the parts it looks at when you upload one somebody else sent. It is a description of what the product does — not a checklist for your document, and not a view on what yours needs.
- Formation, name and purpose. The firm, what it does, and where it operates. goHeather flags: a purpose written so narrowly that an ordinary change of direction would need the document amended.
- Capital contributions. What each partner put in — cash, property or work — and how non-cash contributions were valued. goHeather flags: contributions of work described but never valued, which is one of the most common sources of later disagreement.
- Profit and loss sharing. How income and losses are divided, which need not follow what anyone contributed. goHeather flags: an even split in a firm where the partners contributed very differently, flagged so it is a choice rather than an inheritance.
- Draws and payments for work. What partners can take out regularly, and any fixed payment to a partner who works in the business. goHeather flags: nothing separating a return on capital from payment for labor, where one partner works and another does not.
- Authority limits. What any one partner can commit the firm to without asking the others. goHeather flags: no ceiling at all, which goHeather raises because the consequences of one partner's signature reach all of them.
- Time commitment and outside activity. What each partner is expected to put in, and what they may do elsewhere. goHeather flags: wording like "such time as the partner deems appropriate", which gives nobody anything to point at when contributions diverge.
- Admitting new partners. The process and consent needed to bring someone in, and how it affects existing shares. goHeather flags: no stated process, which tends to mean the answer defaults to everybody agreeing.
- Departure and buyout. How a partner leaves, what happens to their share, and how it gets valued and paid. goHeather flags: terms under which one departure would wind up the whole firm, with the continuation alternative shown beside them.
- Death, illness and divorce. What happens to a partner's share on those events. goHeather flags: nothing covering them, which can leave the remaining partners alongside somebody who has never worked in the business.
- Deadlock and disputes. How disagreements get resolved, and how a tie gets broken. goHeather flags: an even number of partners with no tie-breaker, which is the same structural problem an evenly-split company has.
Capital, profit share and voting are separate questions
goHeather asks about these one at a time, because templates tend to tie them together and remove a choice the partners should be making.
A partner might put in most of the money, take half the profit, and hold one vote of two. That can be an entirely sensible bargain when the other partner is providing the expertise and doing the work. It is only a problem when nobody realised they had a choice.
So it asks what each partner contributed and what that was worth, including contributions of work — which is where a lot of later trouble starts, because effort described but never valued is hard to argue about years afterwards. Then it asks how profit should be divided, and separately how decisions get made.
Where one partner works in the business and another does not, goHeather raises the question of paying for that work separately from the profit share, so the labor is recognized without distorting the underlying split.
- What each partner contributed, and what non-cash contributions were worth
- How profit and loss get divided
- How votes work, and whether they follow money or headcount
- Whether a working partner is paid separately for that work
Why authority limits matter more here
In a partnership the consequences of one partner's signature tend to reach all of them, which makes this a question worth settling explicitly rather than leaving to assumption.
goHeather asks for a threshold: what can a partner commit the firm to in the ordinary course without checking, and above what figure does it need the others? It also asks specifically about the categories that cause the most damage — borrowing, giving guarantees, selling assets, taking on long leases, hiring senior people.
It is worth understanding what those limits do. They govern the relationship between the partners: a partner who goes beyond their authority answers to the others for it. Whether an outsider who dealt with that partner in good faith is affected is a different question, and one to ask an attorney about. The limits are still worth having, and they are not a substitute for insurance or for thinking about which structure you are using in the first place.
Keeping the firm going
goHeather flags this as one of the two highest-value provisions in the document, because the alternative is bad. Where the agreement says nothing, the arrangement that applies can be one where a single departure unwinds the whole firm — which for a business with staff, customers and premises is nobody's intention.
What it builds instead is a continuation provision: the remaining partners carry on, and the departing partner's share is bought out. Then it asks the harder question, which is how the price gets worked out. A buyout with no method attached has simply postponed the argument.
It offers the approaches firms use — a formula against revenue or earnings, a value the partners agree and record each year, or a defined appraisal process — and asks about payment terms too, since a lump sum is often not realistic. Instalments over several years is the common landing point.
It also asks about the departures nobody plans: death, illness, bankruptcy, divorce. Each should have an answer, so a share does not end up with somebody who has never worked in the business. Many firms fund the death and illness buyouts with insurance, which turns an unaffordable obligation into a manageable one, and goHeather raises that as something to discuss with a broker.
The even-number problem
Two partners with equal shares is the most common shape and the most fragile. When they disagree on something needing agreement, there is no majority to carry it and no tie-breaker to end it.
goHeather raises this for any firm with an even number of partners, and offers the mechanisms that get used: mediation followed by arbitration, a casting vote on defined categories, an independent tie-breaker for operational disputes, or a buy-sell where one partner names a price and the other chooses whether to buy or sell at it.
That last one is decisive and tends to favor whoever has more cash available, so it suits evenly-matched partners better than an unequal pairing. goHeather explains the trade-off rather than picking for you.
The thing that matters is choosing something. An agreement silent here leaves two partners who disagree with no route forward at all, and that is a much worse position to be in than having picked an imperfect mechanism early.
Why goHeather asks how the partnership is set up
A partnership can come about simply because people started working together, without anyone filing anything — and where the partners have not written their own terms, a default set applies instead, covering how profits are split, how decisions are made and what happens when someone leaves. Those defaults differ depending on where you are and are frequently not what the partners would have agreed if asked. goHeather asks where the partnership operates, which structure you are using and how you want the main questions answered, then writes them down explicitly. It flags the areas most often left silent: authority limits, what happens on a death or a departure, and how a deadlock gets broken. What it does not do is tell you what your defaults are, or what exposure each partner carries. Both are worth a business attorney's time before you sign.
Before you go. goHeather is a technology company, not a law firm. We do not provide legal advice, legal opinions, or any view on whether a contract or a clause will hold up. Everything above describes what our software does when you build or upload a document. Rules differ from state to state and change over time, and what is right for your business depends on facts we do not have. Have an attorney licensed where you operate review anything that matters.
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partnership agreement template questions
What people ask before they build a Partnership Agreement.
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