Articles of partnership
Articles of partnership is a voluntary contract between two or among more than two persons to place their capital, labor, and skills, and corporation in business with the understanding that there will be a sharing of the profits and losses between/among partners. Outside of North America, it is normally referred to simply as a partnership agreement.[1]
Common components
There are also multiple sections which are often included as well in articles of partnership, based on the circumstance. These are:
- Host agreement – includes the granting of one partner the rights to manage and administer the business or a specific department.
- Majority management – includes the authorization of a majority of partners to manage the affairs of the entire partnership. This is particularly common where there are numerous partners.
- Annual account – includes provisions to account for, annually, the property and debts of the business.
- Consistent interest – includes the forbidding of any partner to carry out business unrelated to the partnership. This is usually implied in articles of partnership.
- Misconduct expulsion – includes the allowance of expelling partners who commit gross misconduct or becomes insolvent, bankrupt, etc. This is particularly common where there are numerous partners.
- Resolution of dispute – includes the submission of arguments to arbitration.
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