Partnership Agreements

Sometimes people are all to quick to set up a private limited company which has tax implications where a Partnership Agreement is more appropriate. Also, there are certain businesses where a private limited company is prohibited.

Most partnerships in Ireland function very well and have never even considered entering into a legally binding Partnership Agreement and it is only when an issue or dispute arises that the true value of same can be appreciated. In short every partnership should have a written Partnership Agreement.

A partnership can be defined as an association of two or more persons carrying on business together with a view to sharing profit. In the absence of a Partnership Agreement a partnership in Ireland is still governed by the Partnership Act, 1890. Some examples (not exhaustive) of the consequences of not have a written agreement are as follows:

1. Each of the partners is individually responsible for all of the liabilities of the partnership, without limitation.
2. The law provides that profits and assets of the partnership are generally shared equally between the partners.
3. The partnership will automatically come to an end if any single partner leaves.
4. The assets of the partnership will automatically be equally distributed.

Every partnership should have a written agreement and we have advised and drafted agreements for all areas of business to include solicitors, doctors, accountants and practically any area where two or more persons go into business together.

For further information and should you have any queries please do not hesitate to contact us at (01)8728233 or by e-mail at bg@bowlergeraghty.ie