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Two people start a business together. They agree on the broad idea – who does what, how the money is split, what happens if one of them wants to leave. Nothing gets written down because they trust each other and there are more pressing things to deal with. A year later, one partner thinks they are entitled to 60 per cent of the profits because they do more of the work. The other disagrees. There is no agreement to go back to.
This is the situation we see most often. At Leo Lawyers, our partnership agreement lawyers in Sydney draft, review, and advise on business partnership agreements that document what the parties actually agreed, before a disagreement arises. We also advise partners on their rights and obligations under the Partnership Act 1892 (NSW) when no written agreement exists, and we act in partnership disputes when the relationship breaks down.
Our partnership agreement services cover:
Over 18 Years of Experience in Commercial Law and Business Disputes
Get clear advice before it becomes a serious problem.
Most partnership agreements fail not because they were poorly drafted but because they were never drafted at all. Where no written agreement exists, the Partnership Act 1892 (NSW) fills the gap with default rules that rarely reflect what the partners actually intended. The most important of these default rules is that profits and losses are shared equally, regardless of the work each partner puts in.
A properly drafted agreement replaces those defaults with terms that reflect the actual arrangement. The following issues need to be addressed in every partnership agreement:
| Issue | What the Agreement Should Say |
|---|---|
| Profit and loss sharing | The exact ratio for each partner, and how it can be varied |
| Capital contributions | What each partner contributes, when, and in what form |
| Partner drawings | How much each partner can draw as regular income and how often |
| Working obligations | What each partner is expected to contribute in time and effort |
| Decision-making | Which decisions require unanimous agreement and which are day-to-day |
| New partner admission | The process and conditions for admitting a new partner |
| Voluntary exit and retirement | Notice period, valuation method, and buy-out payment timeline |
| Removal for cause or underperformance | The triggers, process, and price for removing a partner |
| Death or incapacity | Whether the estate inherits the interest or a buy-out is triggered |
| Non-compete obligations | Restrictions on a departing partner operating in the same industry |
| Dispute resolution | The required steps before a partner can commence legal proceedings |
| Dissolution | How the partnership is wound up and how assets and debts are allocated |
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Our partnership agreement lawyers in Sydney act for people starting a business together who want to get the arrangement documented properly, and for partners whose relationship has broken down and who need clear advice on where they stand. We act for both sides of a partnership dispute and for individuals who have discovered they are personally exposed to partnership debts they did not know existed.
Book a consultation with Damin Murdock today.
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