Sample Partnership Agreement Ontario

When it comes to starting a partnership or joint venture in Ontario, Canada, a clear and concise partnership agreement is essential. A partnership agreement lays out the terms and conditions of the partnership, including the roles and responsibilities of each partner, the distribution of profits and losses, and the terms of dissolution. In this article, we will take a closer look at what a sample partnership agreement in Ontario should include.

Partnership Name and Purpose

The first section of a partnership agreement should name the partnership and state its purpose. This is important for legal and tax purposes, as it establishes the entity as a partnership. The purpose of the partnership should be clearly defined, whether it is to operate a business, invest in real estate, or provide a service.

Term of Partnership

The next section of the partnership agreement should specify the term of the partnership, or how long the partnership will exist. This can be for a specific period of time, such as five years, or it can be indefinite. The agreement should also include provisions for the early termination of the partnership, such as if one partner wants to leave or the partnership is not profitable.

Capital Contributions

Partnerships typically require an initial investment from each partner, which is known as a capital contribution. The partnership agreement should specify the amount and timing of each partner`s capital contribution, as well as any additional contributions required over time. This section should also outline how profits and losses will be distributed among the partners based on their capital contributions.

Management and Decision Making

The partnership agreement should lay out the management structure of the partnership, including the roles and responsibilities of each partner. This section should also include provisions for decision making, such as how disputes will be resolved and what happens in the event of a tie vote.

Dissolution and Termination

Finally, the partnership agreement should outline the circumstances under which the partnership can be dissolved and terminated. This could include the death of a partner, bankruptcy, or a breach of the agreement. It should also include provisions for the distribution of assets and liabilities upon dissolution.

Conclusion

A well-drafted partnership agreement is essential for any partnership or joint venture in Ontario. It helps to ensure that all partners are on the same page from the outset and can prevent disputes down the line. While this article provides a general overview of what a sample partnership agreement should include, it is always advisable to consult with a lawyer or accountant who specializes in partnerships and joint ventures in Ontario to ensure that your agreement meets all legal and tax requirements.

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