Content Partnership Agreement
A partnership is a common-law form of business for two or more people. It arises automatically, without the business partners having to file any paperwork with the secretary of state, whenever the business partners engage together for a common business purpose. While partnerships are governed by common law principles, state law allows the partners to modify the “default” rules by entering into a content partnership agreement.
Basic provisions of a content partnership agreement
The first sections in the a content partnership agreement cover basic information such as the name of the partnership, its “doing business as” name (if any), the names of each initial partner, the type of partnership and the duration of the partnership. The type of partnership is critical. General partnerships allow for equal management and profits rights among partners. Limited partnerships, in contrast, account for two types of partners — general partners, who manage the partnership and are personally liable for its debts and obligations, and limited partners, who are generally investors and are not personally liable for debts and obligations.
Capital requirements of a content partnership agreement
The lifeblood of any business is its capital. Partners provide capital to a partnership either in the form of cash or as property assets. The content partnership agreement should address the initial capital requirement of each partner, as well as the circumstances under which additional capital may be called for. Additional financial data may be addressed in this section, such as accounting requirements, the fiscal year if different from a calendar year and the circumstances under which partners may ask for and receive an accounting.
Management and rights of a content partnership agreement
Operating a partnership is, by its nature, collaborative. Yet the partners may agree that management and rights to profits should be based on some other factor, such as capital contribution. Under common law, each partner has a right to operate the partnership simply by virtue of being a member of the partnership. The content partnership agreement should specify that such rights are defined by the percentage of contribution a partner has made to the business. For example, assume a partnership has three partners. Partners 1 and 2 each contribute 40 percent of the capital, for a combined total of 80 percent; partner 3 contributes the remaining 20 percent. The management and rights section could specify that each partner’s ability to manage the partnership is based on that partner’s contribution; likewise, a partner’s “take” of profits is also based on the initial contribution portions.
Transfer of interest and general provisions of a content partnership agreement
The final sections of the content partnership agreement should be devoted to addressing transfers of ownership and contain general provisions found in most contacts. This is also known as boilerplate. Ownership transfer is important; if a partner sells his interest to someone who is not business savvy, the entire operation could suffer. A portion of the content partnership agreement should address the circumstances under which a partner may transfer his interest. Often the content partnership agreement requires the partner to first offer the sale of his interest to the partnership itself. Finally, because the content partnership agreement is a contract between the partners, it should contain general provisions important to other agreements, including notice provisions and choice of law, meaning what jurisdiction’s laws will apply in case of a dispute.
Taking a vote or action of dissolution
If there exists a content partnership agreement that has provisions on dissolution, partners should abide by the provisions. In most of the cases, the dissolution provisions of a content partnership agreement provide that all or most of the partners should consent before the partnership is dissolved. In such instances, one should have partners that vote on a resolution to dissolve the partnership. Thus, there will be a majority or unanimous consent that is required by the content partnership agreement. The voting results of the vote should thus be recorded.
If the partners desire to dissolve the partnership owing to disagreements, the partners have various options. First, the content partnership agreement may provide for a solution. For instance, there is an option for the partners that desire to progress with the business to buy out one or more partners that want out. Further, the partners could bring in an independent mediator to aid in the resolution of disagreements. Eventually, if the partners fail to agree after attempting all the options, the partners fall back on going to court and have it determined on the procedure of the dissolution. Moreover, the partners should avoid going to court, but if the worst comes to the worst, the partnerships could select competent lawyers to represent them.
If the partners have no content partnership agreement, they will have to rely on the Revised Uniform Partnership Act. Generally, the Act provides that any at-will partnership will be dissolved if any of the partners decides to leave the partnership. This is unless the remining partners elect to proceed with the partnership without the dissociated partners.
Filing forms with the state for a content partnership agreement
In most nations, general partnerships are not required to be filed with forms upon their dissolution. Nonetheless, to aid in making things clearer for the partnership and limit liability, it is best if partners did so. Hence, they should file a Statement of Dissolution with the Department of States’s Division of Corporations (DOC). The Statement of Dissolution should provide the name of the partnership and state that it has dissolved and is about to wind up the business. Further, the form should be typewritten and printed legibly in English. Moreover, the statement should be signed by the partners or other authorized persons. The individual that files the Statement of Dissolution should promptly provide partners not involved with filing with a copy.
Paying debts and distribution of assets
After the partners have votes to dissolve the partnership under the rules of the content partnership agreement, or in the absence of one, the partnership is dissolved under the Partnership Act rules. The partners also need to take extra steps to dissolve the agreement. Such include completion of any partnership work that is in progress, selling some or all the assets, payment of debts, and distribution of the remaining assets to other partners. Generally, the steps include:
- Completion of any partnership projects
- Selling some or all of the assets
- Payment of debts
- Distribution of the remaining assets to the partners
It is also important that all the debts are settled before they are distributed among the partners. The existing legislation in most nations provides rules in which people are paid when winding up a partnership. Generally, creditors should be paid first then the partners share out the remaining amount as per their capital contributions. Eventually, if anything remains, the partners are entitled to distribution. All the preceding should be expressly outlined in the content partnership agreement.
Notification of creditors, clients, and suppliers in content partnership agreements
While there is no legal requirement, partners should notify the creditors and customers that the relationship is being dissolved. In some instances, if one of the partners makes a deal with someone after dissolution, the partners could be on the hook for the deal. Such includes the debts that are involved. This happens if the partners did not have notice of the dissolution. There are several options for how to grant people notice of the dissolution. One of them is sending written notifications that are written. Another suitable one is publishing a notice is in one of the local newspapers.
Final tax matters in content partnership agreements
Most nations do not require signatories to a content partnership agreement to obtain clearance of tax before the dissolution of the partnership. Nonetheless, one must notify the Department of Revenue that they are closing the business. The Department of Revenue prefers that partners submit the information using the online system. Further, the system can be used to close the reemployment tax account, sales tax account, and other tax account that are business-related.
For the federal tax purposes, the final return box on the IRS Form should be checked. If the IRS rules terminate the partnership before the end of the normal tax year. Also, the final federal returns are due on the fifteenth day of every month after the termination date.
Out-of-state registration
The content partnership agreement should be registered or qualified to do business with other states. If so, the partners may file separate forms to terminate the right to conduct the business in the states. Depending on the involved states, the form may be termed a termination of registration, certificate of the existence of termination, application of withdrawal, or the certificate of surrender of the right to transact business. Further, failure to file extra termination forms denotes that one will continue to be liable for the annual report fees and minimal business taxes.
References
https://www.izito.ws/search/nairobi
https://www.zapmeta.ws/search/nairobi
https://search.activebeat.com/family/parenting
https://www.europarl.europa.eu
https://uk.bestdiscoveries.co/topresults/bestdiscoveries
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