Partnership Agreement Lawyers for Australian Businesses

Yes, having a partnership agreement is essential for any business with more than one owner. A partnership agreement sets out each partner’s rights, responsibilities and contributions, how profits and losses will be shared, and how disputes will be resolved. Without one, partners are exposed to unnecessary risk and uncertainty, particularly given that each partner can be personally liable for the debts of the business.

If there is no partnership agreement in place, your partnership will be governed by the default rules under the relevant state or territory Partnership Act. These default rules generally provide that profits, losses and management responsibilities are shared equally between partners, regardless of each partner’s actual contribution. This can create significant risk, particularly if one partner’s actions create liability for the entire partnership.

A partnership agreement does not need to be notarised, and in some cases a partnership can exist even without a written agreement. However, having a written partnership agreement is strongly recommended. A verbal or informal arrangement makes it difficult to prove what was agreed if a dispute arises, whereas a written partnership agreement provides clarity and certainty for all partners from the outset.

Yes, a partnership agreement can be changed or modified at any time, provided all partners agree to the changes. Any amendments should be properly documented and signed by all partners to ensure they are legally effective and enforceable.

While there is no legal requirement to use a lawyer, engaging an experienced partnership agreement lawyer is strongly recommended. A well-drafted partnership agreement protects your interests, clarifies each partner’s rights and obligations, and reduces the risk of costly disputes down the track. Gladwin Legal’s commercial lawyers can draft, review or negotiate your partnership agreement and offer a free initial consultation to discuss your needs.

A partnership agreement governs the relationship between partners in a partnership, where partners are typically personally liable for the debts of the business. A shareholders agreement, on the other hand, governs the relationship between shareholders in a company, which is a separate legal entity offering limited liability protection. The right structure for your business depends on factors such as liability, tax treatment and how you intend to grow, and our commercial lawyers can advise on which option best suits your needs.

To start a partnership business in Australia, you’ll generally need to choose a business name, apply for an Australian Business Number (ABN) and register the business name if it differs from the partners’ own names. Before commencing operations, it’s important to put a partnership agreement in place to document each partner’s rights, responsibilities and contributions, helping to avoid disputes as the business grows.

To dissolve a partnership, you should follow the process set out in your partnership agreement. If no agreement exists, the relevant state or territory Partnership Act will apply. Dissolving a partnership generally involves notifying the other partners, settling outstanding debts, distributing remaining assets, and notifying the Australian Business Register and Australian Taxation Office as required.