Do we need a written partnership agreement if we already run the business together?

Yes. Operating a business jointly can create a general partnership by conduct even without a written agreement, and in that case, chapter 620's default rules govern profit sharing, management and dissolution: rules that often do not match what the partners actually intended.

Can partners split profits differently from their ownership percentages?

Generally yes. Partnership agreements can allocate profits, losses and distributions differently from ownership or capital-contribution percentages, subject to the partners' agreement and applicable tax rules on allocations.

What happens if a partner wants to leave the business?

The partnership agreement should specify whether the partnership continues or dissolves on a partner's withdrawal, and, if it continues, how the departing partner's interest is valued and paid out.

Can one partner bind the partnership to a contract without the others' consent?

Under general partnership default rules, a general partner typically has apparent authority to bind the partnership in the ordinary course of business, which is why a partnership agreement should specify which decisions require consent from the other partners.

What happens if a partner dies?

Absent a partnership agreement addressing the issue, a partner's death may trigger dissolution or a buyout obligation under statutory default rules. A written agreement should specify whether the business continues, how the deceased partner's interest is valued and how it is paid to the estate.

Florida Partnership Agreement Attorney

Drafting partnership agreements that govern capital, management, allocations and exits among Florida business partners.

The agreement that replaces statutory defaults

Florida's Revised Uniform Partnership Act and Revised Uniform Limited Partnership Act, chapter 620, Florida Statutes, provide default rules governing partnerships that have no written agreement, or whose agreement is silent on a given point. A well-drafted partnership agreement replaces those defaults with terms the partners have actually negotiated.

What a partnership agreement should cover

Capital contributions: cash, property, or services contributed by each partner and the process for future capital calls.
Profit and loss allocation: how income and losses are divided, which need not track capital contributions if the partners agree otherwise.
Management authority, which partners can bind the partnership in contracts and which decisions require unanimous or majority consent.
Partner compensation: guaranteed payments or salary for partners actively working in the business, distinct from profit distributions.
Admission of new partners: the process and required consent for adding a partner.
Withdrawal, retirement, expulsion and death: how a partner's exit is handled, including any buyout obligation and valuation method.
Dissolution: the events that trigger winding up the partnership and how remaining assets are distributed.

Managing the unlimited-liability exposure of general partners

Because general partners bear personal liability for partnership obligations, including those incurred by another partner, the partnership agreement should address how much authority each partner has to obligate the partnership and whether certain actions require prior consent from the other partners before being undertaken.

Limited partnership agreements

A limited partnership agreement additionally distinguishes the rights and restrictions applicable to limited partners, including the participation limits that preserve their liability protection, information and consent rights and how the general partner's authority and compensation are structured.

Family and professional practice partnerships

Partnerships among family members or professional colleagues carry particular sensitivity around succession, disability and what happens if a personal relationship changes. These agreements benefit from addressing those scenarios directly rather than relying on statutory defaults that were not written with a family or professional context in mind.

Answers

Frequently asked questions

Do we need a written partnership agreement if we already run the business together?: Yes. Operating a business jointly can create a general partnership by conduct even without a written agreement, and in that case, chapter 620's default rules govern profit sharing, management and dissolution: rules that often do not match what the partners actually intended.
Can partners split profits differently from their ownership percentages?: Generally yes. Partnership agreements can allocate profits, losses and distributions differently from ownership or capital-contribution percentages, subject to the partners' agreement and applicable tax rules on allocations.
What happens if a partner wants to leave the business?: The partnership agreement should specify whether the partnership continues or dissolves on a partner's withdrawal, and, if it continues, how the departing partner's interest is valued and paid out.
Can one partner bind the partnership to a contract without the others' consent?: Under general partnership default rules, a general partner typically has apparent authority to bind the partnership in the ordinary course of business, which is why a partnership agreement should specify which decisions require consent from the other partners.
What happens if a partner dies?: Absent a partnership agreement addressing the issue, a partner's death may trigger dissolution or a buyout obligation under statutory default rules. A written agreement should specify whether the business continues, how the deceased partner's interest is valued and how it is paid to the estate.

Official sources

Consult the official sources above for current rules and procedures.

Partnership Agreements