When two or more people decide to form a legal partnership, they may want to negotiate a partnership agreement. This kind of agreement can modify the standard rights, duties, and powers that partners have under the law.
Why Would Partners Want a Partnership Agreement?
In The Bahamas, the Partnership Act establishes partners' obligations and rights under the law. The common law (laws derived from historical legal cases) supplements the Partnership Act. A partnership agreement can contain wording that changes the laws in the Partnership Act and the common law.
Partners may want a partnership agreement because they want to modify one partner's responsibilities, because they want to protect themselves in case the partnership ends, or because they want to describe specific duties for which each partner will be responsible. Further, there are many other reasons why a partnership agreement can be helpful.
What Does a Partnership Agreement Say?
A partnership agreement is a legal document that establishes the partners' rights, duties, and powers. At a minimum, a partnership agreement should list:
- The type of partnership (general or limited);
- The legal names of the partners;
- The purpose of the partnership or line of business in which it engages;
- Which rights, duties, and powers each partner will have, to the extent that they are different than in the Partnership Act and common law; and
- If the partnership is limited, the agreement could list the amounts that each partner contributed to capital of the partnership.
Depending on your line of business and your discussions with your partners, you may want additional information included in the agreement. A lawyer familiar with Bahamian partnership law can advise you on preparation of a partnership agreement. You also can seek legal help for modification or interpretation of an existing partnership agreement.
To find out more about partnership agreements, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.