PARTNERSHIP AGREEMENT
THIS AGREEMENT is hereby entered into on the First day of XXX ,Two Thousand and Twenty-Three
AMONG
- XXX, whose address is XXXX, hereinafter referred to as (“XXX”)
AND
- XXX, whose address is XXXXX, hereinafter referred to as (“Shams”)
AND
- XXX, whose address is XXXX, hereinafter referred to as (“Sam”) collectively referred to as (“Partners”)
- FORMATION AND PURPOSE OF THE PARTNERSHIP:
Shams Mike and Sam Zain agree to buy a partnership interest in the existing business owned by XXX under the name of XXX. The Partnership will be governed by the laws of the State of Texas and engage in the business of XXX and all other activities necessary to carry on the business of the Partnership as provided herein.
- PRINCIPAL OFFICE:
The principal office of the Partnership will be located at XXX.
- TERM
The Partnership shall commence on June XXX, 2023, and continue until it terminates in accordance with the terms of this Agreement.
- LIABILITY FOR PREVIOUS WORK:
Mario agrees that Shams and Sam should not be held liable for any work completed before June XXX, 2023, by XXX. XXX will be solely responsible and liable for any lawsuits, negligence, or damages resulting from work completed before June XXX, 2023.
- CAPITAL CONTRIBUTIONS:
Shams will deposit a check of $7,500 in the American Electric account at Bank of America before June XXX, 2023, and another check of $12,500 in the same account by July 15th, 2023. The total contribution from Shams will be $20,000.
Sam will deposit a check of $7,500 in the American Electric account at Bank of America before June XXX, 2023, and another check of $12,500 in the same account by July XXX, 2023. The total contribution from Sam will be $20,000.
XXX will not invest any capital in the business but will sell 60% of his business to XXX and XXX for a total of $40,000, based on a valuation of $66,675.
- PARTNERSHIP PERCENTAGE:
The partnership percentage distribution will be as follows:
- XXX: 40%
- XXX: 30%
- XXX: 30%
- BANK ACCOUNT:
The Partnership will establish and maintain a single bank account under the name XXX in Bank of XXX. No partner may withdraw any portion of capital from the account without the consent of the other partners. All funds in this account shall be used exclusively for business expenses and payroll. Personal use of the funds by any partner is prohibited.
- DISTRIBUTION OF PROFITS AND LOSSES
Reinvestment of Net Profits: The net profits of the Partnership shall be reinvested in the company for future growth, unless otherwise agreed upon by all partners.
If agreed, the partners may take profit checks, following these percentages: XXX 40%, XXX 30%, and XXX30%.
If the company shows a loss at the end of the year, the partners will be liable for the losses from the invested capital amount in the same percentage as mentioned above.
- PARTNERS’ COMPENSATION:
Mario will receive a payroll of $1,250 per week.
Shams and Sam will not receive any payroll.
- MANAGEMENT AND DECISION-MAKING:
Each partner has equal rights in the management of the Partnership.
The partners will dedicate as much time and effort as necessary to ensure the success of the company.
- MAJOR CHANGES AND DECISION-MAKING:
Any major changes, including the following, require the agreement of two out of the three partners:
- Making any contract or agreement, including a lease, security agreement, or mortgage.
- Borrowing or lending money.
- Selling all or any of the assets of the Partnership, excluding assets sold in the regular course of business.
- Hiring and firing employees.
- DISSOLUTION AND LIABILITIES:
If the Partnership dissolves for any reason, all partners will be jointly and severally liable for the payment of all debts, liabilities, and obligations of the Partnership, including all expenses of liquidation.
- DEATH OF A PARTNER:
If a partner dies, the remaining partners may choose to either dissolve and liquidate the Partnership or continue the Partnership by purchasing the deceased partner’s capital investment. The decision to dissolve or continue the Partnership requires the unanimous consent of the remaining partners. If the remaining partners choose to purchase the deceased partner’s share, they must provide written notice of their intention to purchase to the deceased partner’s family member within 60 days after the partner’s death.
- TRANSFER OF PARTNERSHIP INTEREST:
No partner shall transfer, assign, sell, give, pledge, or dispose of any or all of their interest in the Partnership without the written consent of all partners. New partners may only be accepted into the partnership with the unanimous consent of all partners.
- CONFIDENTIALITY:
Each partner agrees to maintain the confidentiality of any sensitive business information or trade secrets disclosed by the Partnership and shall not disclose such information to any third party without the prior written consent of all partners.
- NON-COMPETITION:
During the term of the partnership and for a period of [insert duration, e.g., 2 years] following the termination of the partnership, no partner shall engage in any business or activity that directly competes with the business of XXX within the territory served by the partnership, without the written consent of all partners.
- TERMINATION:
The Partnership may be terminated by unanimous written consent of all partners or by any partner providing written notice of termination at least [insert notice period] prior to the desired termination date.
In the event of termination, the partners shall promptly liquidate the Partnership, settle all outstanding obligations, and distribute remaining assets in accordance with this Agreement.
Survival of certain provisions, such as confidentiality, non-competition, indemnification, and dispute resolution, shall continue after termination.
- INTELLECTUAL PROPERTY:
All intellectual property created or utilized by the partnership shall be owned by the partnership. Each partner hereby assigns all rights, title, and interest in such intellectual property to the partnership and agrees to execute any necessary documents to effectuate such assignment.
- INDEMNIFICATION:
Each partner shall indemnify and hold harmless the other partners from any claims, liabilities, damages, costs, or expenses arising out of their actions, omissions, or misconduct in connection with the partnership’s business, except to the extent caused by the gross negligence or willful misconduct of the indemnified party.
- DISPUTE RESOLUTION:
Any dispute arising out of or related to this Agreement that the partners are unable to resolve shall be settled by arbitration in the State of Texas in accordance with the rules of the American Arbitration Association.
- BINDING EFFECT:
This Agreement shall be binding upon and inure to the benefit of the partners and their respective legal representatives, heirs, administrators, and executors.
- ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement between the Partners and supersedes all prior understandings or agreements, whether written or oral, relating to the subject matter hereof.
- MODIFICATION:
This Agreement can only be modified by a written agreement signed by all the partners.
IN WITNESS WHEREOF, this Agreement has been executed and signed by all partners.
Signature: ______________________
Date: __________________________
Name: XXX
Signature: ______________________
Date: __________________________
Name:XXX
Signature: ______________________
Date: __________________________
Name:XXX
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