Articles Of Partnership

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DEFINITION of 'Articles Of Partnership'

A document that formalizes an agreement between parties who want to enter a business arrangement to pool their labor and capital and in which all owners are equally responsible for the company's liabilities and entitled to its assets according to agreed-upon percentages. In addition to being an important legal document, the articles of partnership can be useful in preventing and resolving disagreements among partners since it clarifies the terms of the relationship.

BREAKING DOWN 'Articles Of Partnership'

The articles of partnership will typically supply the name of the partnership, its principal place of business, the purpose of the business, term of the partnership, each partner's initial capital contribution, each partner's percentage of interest in the partnership, how profits will be distributed, how the partnership will be managed, how salaries (if any) will be distributed, how and under what conditions partnership rights can be transferred or sold, and other information that is essential to the business arrangement.

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RELATED FAQS
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    Joint ventures are a very specific type of business arrangement. They can be organized in several different legal structures, ... Read Full Answer >>
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    Partnership insurance is actually quite common. Most of the time, partners buy insurance to safeguard against the possibility ... Read Full Answer >>
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    Advantages of greenfield investments include increased control, the ability to form marketing partnerships and the avoidance ... Read Full Answer >>
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