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BACKGROUND

(A)  The Partners carry on the business of [describe business of the partnership].

(B)  The Partners shall carry on the Partnership under the terms of this Deed.

1. DEFINITIONS

1.1. The following words and phrases have the following meanings:

• Accountants: the Partnership's accountants or auditors from time to time;
• Bank: the Partnership's bank from time to time;
• Business Day: a day other than a Saturday, a Sunday or a public holiday in England and Wales;
• Capital Account: a Partner's capital account maintained according to clause 5.1; 

Confidential Information: all information of a confidential nature (however recorded or preserved) concerning the Partnership, a Partner (or former Partner) or their respective businesses (including details of customers, clients, suppliers, plans, intentions, market opportunities, operations, processes, product information, know-how, designs, trade secrets or software) and the terms of this Deed; 

Continuing Partners: those persons who, on a change of Partners, continue as Partners; 

Contribution: any money paid or assets transferred to the Partnership by a Partner as a capital contribution; 

Current Account: a Partner's current account maintained according to clause 7.1; 

Exit Date: the date a Partner retires, is deemed to retire or is expelled from the Partnership; 

Leaving Partner: a Partner who has retired, been deemed to retire or been expelled from the Partnership;

Managing Partner: the Partner appointed by the Partners from time to time as set out in clause 15;

Partners: the Partners as long as they remain partners and all other people who are or become parties to this Deed at any time;

Partnership: the partnership formed and carried on by the Partners as set out in this Deed;

Partnership Accounts: the annual accounts of the Partnership to be prepared as set out in clause 8 below;

Partnership Property: the Premises and all other assets (or rights in them) which are used by the Partnership for the purposes of the business described in this Deed;

Partnership Year: each period of 12 months ending on the Accounts Date, or any other period determined by the Partners;

Premises: the offices or other premises occupied by the Partnership, details of which are in clause 0; and

Profit: for any Partnership Year, the net profit of the Partnership as shown by the Partnership Accounts for that Partnership Year, and Loss has a corresponding meaning.

1.2. In this Deed, unless the context means a different interpretation is needed:

•  including means "including without limitation";
• words denoting the singular include the plural and vice versa, and words denoting any gender include all genders;
•  a person includes firms, companies, government entities, trusts and partnerships;
• a party means a party to this Deed and includes its assignees and successors in title and, in the case of an individual, to his estate and personal representatives;
• reference to a clause or Schedule is to a clause or the Schedule of or to this Deed (and the Schedule forms part of this Deed);
• reference to a statute or statutory provision includes any modification of or amendment to it, and all statutory instruments or orders made under it; and
• reference to writing or written includes faxes and email but not any other type of electronic communication.
• The headings in this Deed are for convenience only and do not affect its meaning.

2. FORMATION AND NAME

2.1. The Partnership is formed for the purpose [describe business].

2.2. The Partnership name is called [insert name].

2.3. Any person can be appointed as a Partner provided:

a) his appointment is approved by a unanimous vote of the Partners; and

b) he enters into a deed of adherence in such form as the Partners specify, under which he agrees to be bound by the terms of this Deed.

3. COMMENCEMENT DATE AND DURATION

3.1.  The Partnership shall begin on [INSERT DATE].

3.2. The Partnership will not automatically dissolve if any Partner stops being a Partner by reason of his death, retirement or expulsion, or a new Partner is admitted, under the provisions of this Deed.

3.3. The Partnership shall continue until such time it is dissolved under clause 15.

4. PLACE OF BUSINESS

The business of the Partnership shall be carried on at the premises known as [INSERT ADDRESS] or such other premises as the Partners from time to time determine under clause 15.

5. CAPITAL

5.1. Each Partner will have a Capital Account.  Any Contribution made by that Partner, his share of any capital profits and any interest payable on his share in the Partnership capital will be credited to his Capital Account.  Any repayment of capital to a Partner and his share of any capital losses will be debited to his Capital Account.  Each Capital Account will be adjusted to reflect any revaluation of assets

5.2. The initial capital of the Partnership is [INSERT VALUE £] to be contributed immediately by the Partners in the amounts set opposite their names in the Schedule.

5.3. Any Contribution must be either a payment in cash into the Partnership bank account, and/or with the agreement of all the other Partners, a contribution of assets.

5.4. If at any time the Partners decide to increase the capital of the Partnership, the amounts of the increase will be contributed in such proportions as they may agree and, in default of agreement, in the same proportions to which they are entitled to share in the capital of the Partnership.

5.5. The capital for the time being of the Partnership belongs to the Partners in the proportions to which the balance of each of their Capital Accounts bears to the total capital of the Partnership.

5.6. No Partner is entitled to any interest on the amount of his share of the Partnership capital unless agreed by all the Partners.

5.7. No Partner while in the Partnership can withdraw any of his capital except with the written consent of all the other Partners.

6. PROFITS AND LOSSES

6.1. The Partners shall share the Profit for each Partnership Year and bear any Loss for any Partnership Year in the proportions specified opposite their names in the Schedule unless otherwise determined by the Partners.

6.2. If any person is a Partner for only part of a Partnership Year, his share of any Profit or Loss for that Partnership Year will be calculated as if he had been a Partner for the whole of that Partnership Year, but the share to which he would otherwise have been entitled will then be reduced by applying a fraction, where the denominator is the number of days in the Partnership Year, and the numerator is the number of days in that Partnership Year during which the person was not a Partner.

7. CURRENT ACCOUNTS, DRAWINGS, AND TAX

7.1. Each Partner will have a Current Account.  The Partner's share of any Profit (other than capital profits) will be credited to his Current Account.  Any drawings made by the Partner, any payments of or provisions for tax and the Partner's share of any Loss (other than capital losses) will be debited to his Current Account.

7.2. Each Partner is entitled to draw on account of his share of the Profit for the then current Partnership Year such sum as the Partners may determine.

7.3. As soon as practicable after the Partnership Accounts are approved under clause 8.3, each Partner's Current Account will be credited or (as the case may be) debited with his share of the Profit or Loss for that Partnership Year, after reserving out of the Profit before distribution any tax which the Accountants estimate is payable by that Partner during the next Partnership Year and after taking into account any amount which has been credited or debited to that Partner's Current Account during the Partnership Year under clause 7.1. If, after this, there is a debit balance on that Current Account, that Partner will, unless the Partners otherwise determine, pay to the Partnership a sum equal to that balance within 30 days from the date which the relevant Partnership Accounts are approved under clause 8.3.

7.4. Subject to clause 7.3, no Partner can, without the prior consent of the Partners, allow a debit balance to arise on his Current Account, and each Partner shall, at the request of the Partners, immediately pay to the Partnership the amount of any such debit balance.

7.5. Without prejudice to clause 7.4 above, if there is at any time a debit balance on any Partner's Current Account then (except as set out in clause 7.6) interest, calculated at the rate of ●% above the base lending rate from time to time of the Bank (the Interest Rate), is payable by the Partner on the amount of the balance outstanding from time to time until payment is made in full.

7.6. Interest is not payable on any part of that debit balance which is attributable to the Partner's share of any Loss for any Partnership Year and is paid to the Partnership under clause 7.3, and where the obligation to repay such debit balance has not yet arisen under clause 7.3.

7.7. The Partners will ensure that any amount of Profit reserved under clause 7.3 on account of tax estimated to payable by a Partner is paid to HM Revenue & Customs (or other appropriate tax authority) at the appropriate time.

8. ACCOUNTANTS, ACCOUNTS AND RECORDS

8.1. The Partners shall ensure that accounting records are kept giving a true and fair view of the Partnership's business. The records shall be available for inspection by each of the Partners and the Accountants at any time.

8.2. As soon as practicable after the end of each Partnership Year the Partners shall instruct the Accountants to draw up a profit and loss account in respect of that Partnership Year and a balance sheet as at the relevant Accounts Date (Partnership Accounts).

8.3. The Partnership Accounts shall be approved by the Partners and, once approved, will become binding on each of the Partners, except in the case of manifest error.

9. BANK ACCOUNTS

9.1. All Partnership monies not required for current expenses and all cheques must be paid promptly into the Partnership bank account.

9.2. All cheques or instructions for the electronic transfer of money from any account of the Partnership with the Bank will be in the Partnership's name and can be drawn or given: 

a) for amounts up to and including the Expenditure Limit, by any Partner; and b) for amounts in excess of the Expenditure Limit, by the Managing Partner.

9.3. In the case of instructions for electronic transfer, written confirmation of those instructions will be signed by the Managing Partner.

10. PARTNERSHIP PROPERTY

10.1. Partnership Property belongs to the Partners in the proportions in which they are entitled to share in the capital of the Partnership.

10.2. Any Partnership Property which is vested in one or more of the individual Partners' names is held by them on trust for all of the Partners.  All costs and expenses relating to such Partnership Property will be borne by the Partnership and the other Partners shall indemnify the Partner or Partners in whom such property is vested against all liabilities which may arise directly or indirectly in respect of it.

11. INDEMNITY

Each Partner shall indemnify and keep indemnified the other Partners from and against all payments made and liabilities incurred by each such Partner in the performance of his duties as a Partner in the ordinary course of the business of the Partnership or in respect of anything necessarily done by him for the preservation of the business or Partnership Property.

12. INSURANCE

12.1. The Partners shall obtain and maintain policies of insurance against risks and for amounts as the Partners agree for:

• Partnership Property;
• employers' liability;
• public liability;
• professional negligence;
• loss of profits resulting from the destruction of or damage to premises used to carry out the business of the Partnership;
• loss of profits resulting from the destruction of or damage to or theft of any plant equipment, chattels, cars and other vehicles, including in the case of any computers or ancillary equipment any virus or corruption or loss of any software or data;
• and any other insurance policies the Partners consider appropriate.

13. HOLIDAYS

Each Partner is entitled to a total of [INSERT NUMBER] weeks' holiday in each Partnership Year. This entitlement includes the usual public holidays. Each Partner must consult with the Managing Partner about the time when the Partner intends to take holidays and take them at a time considered most practical for the Partnership.

14. OBLIGATIONS OF PARTNERS

14.1. Each Partner agrees at all times:
[INSERT OBLIGATIONS]

15. MANAGEMENT AND DECISIONS

15.1. Unless this Deed specifies otherwise, where a matter under this Deed requires the decision of the Partners, such matter will be determined by the Partners by simple majority vote.

15.2. The following matters require the unanimous consent of the Partners: [INSERT MATTERS]

15.3.  ● is the Managing Partner of the Partnership, for a period of ● years from the date of this Deed.  After this period the Partners shall re-elect ● or appoint a new Managing Partner.  

15.4. Unless otherwise decided by the Partners, the Managing Partner shall not be entitled to any additional remuneration or share of profits by virtue of his being the Managing Partner. The day-to-day business affairs of the partnership shall be directed by the Managing Partner whose duties shall include: [INSERT DUTIES]

15.5. Meetings of the Partners may be called by any Partner but, to the extent possible, will be convened upon request to and notice by the Managing Partner. Not less than 10 days' notice of the meeting must be given to all those entitled to attend, but a meeting can be convened at shorter notice if all the Partners agree in writing. The quorum for a meeting of the Partners is all the Partners.

16. GOODWILL

16.1. The goodwill of the Partnership is deemed to be of nil value and the share of a Leaving Partner in the goodwill, if any, of the Partnership automatically accrues to the Continuing Partners and no Leaving Partner has any claim in respect of it.

17. EXPENSES

17.1. Each Partner is entitled to claim back out-of-pocket expenses properly incurred by him in connection with the Partnership on provision of a receipt and VAT invoice where appropriate.

18. VOLUNTARY RETIREMENT

18.1. A Partner can retire from the Partnership by giving not less than 6 months' written notice to the other Partners. His Exit Date will be the date that notice expires.

19. INVOLUNTARY RETIREMENT

19.1. A Partner will be deemed to retire from the Partnership:
19.2. immediately on his death and his Exit Date will be the date of his death; on expiry of at least three months' written notice from the Partners requiring him to retire as a Partner because he has been unable to perform his duties as a Partner for either:

(a) a continuous period of 6 months or more; or
(b) an aggregate period of 6 months or more during the previous 12 month period.

20. EXPULSION

20.1. The other Partners may by written notice (signed by all of them) to the Partner concerned expel that person immediately from membership of the Partnership if that person commits a serious breach of this Deed which is either incapable of remedy or is not remedied within 20 Business Days after it occurs.

22. PAYMENTS TO LEAVING PARTNERS

22.1. On the death of a Partner the Partners must on the first day of the next three months, pay an amount equal to his normal monthly drawings then applicable. These payments will be made to the deceased Partner's personal representatives, widow or another person as the Partners decide in their absolute discretion (but the Partners are not concerned whether or not the recipient(s) of these payments will prove to be entitled at law to the deceased Partner's estate).

23. LEAVING PARTNER OBLIGATIONS

23.1. Unless it is with the agreement of the Continuing Partners, a Leaving Partner must not during the period of 12 months from his Exit Date:

• interfere with, solicit or try to entice away from the Partnership a person he knows was a client or customer of the Partnership, or a person he knows regularly introduced clients or customers to the Partnership, during the 12 months period before his Exit Date;
• supply goods or services to or deal with (whether on his own account or through a firm, company or other organization he is involved with) a person he knows is a client or customer of the Partnership at his Exit Date;
• try to entice away from the Partnership, employ or otherwise engage anyone who is a Partner or an employee of the Partnership at his Exit Date; or
• engage in any business similar to the business of the Partnership or with a similar name to the name of the Partnership.

24. DISSOLUTION

If the Partnership is dissolved, the affairs of the Partnership will be wound up and the assets and liabilities dealt with in the manner provided by the Partnership Act 1890.

25. ENTIRE AGREEMENT

25.1. This Deed contains the whole agreement between the parties relating to its subject matter and supersedes all prior discussions, arrangements or agreements that might have taken place in relation to the Deed. Nothing in this clause limits or excludes any liability for fraud or fraudulent misrepresentation.

25.2. Each party acknowledges that in entering into this Deed it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Deed.

26. ASSIGNMENT

No party may assign, transfer, sub-contract, or in any other manner make over to any third party the benefit and/or burden of this Deed without the prior written consent of the other party or parties.

27. VARIATION

No variation to this Deed will be valid or binding unless it is recorded in writing and signed by or on behalf of each of the parties.

28. NOTICES

28.1. Any notice given to a party under or in connection with this Deed shall be in writing and shall be delivered by hand or by pre-paid first-class post or other next working day delivery service at that party’s address as set out at the beginning of this Deed.

28.2. Any notice shall be deemed to have been received:

•  if delivered by hand, on signature of a delivery receipt or at the time the notice is left at the proper address; and
• if sent by pre-paid first-class post or other next working day delivery service, at 9.00 am on the second Business Day after posting or at the time recorded by the delivery service.
• A notice given under this Deed is not valid if sent by e-mail or fax.

29. THIRD PARTY RIGHTS

The Contracts (Rights of Third Parties) Act 1999 shall not apply to this Deed and no third party will have any right to enforce or rely on any provision of this Deed.

30. SEVERANCE

If any court or competent authority finds that any provision of this Deed (or part of any provision) is invalid, illegal or unenforceable, that provision or part-provision will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of this Deed will not be affected.

31. GOVERNING LAW AND JURISDICTION

31.1. This Deed and any non-contractual obligations arising in connection with it will be governed by and interpreted in accordance with the laws of England and Wales.

31.2. All disputes arising under or in connection with this Deed shall be subject to the exclusive jurisdiction of the courts of England and Wales.

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