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Partnership Agreement: What Is It?

A partnership agreement is an agreement between two or more parties to enter into a partnership. The purpose of a partnership agreement is to explain the duties and responsibilities of every person or entity who will be part of the partnership. Common elements include percentage of ownership of each partner, how profits and losses will be split among the partners, who can execute binding contracts on behalf of the partnership, who will make the daily and management decisions for the partnership, what will happen in the event that a partner dies, and how problems between the partners will be solved.

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