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1. Restrictions on the Nature of the Company Business
- A. Do the Partners desire to participate in other ventures, apart from the
partnership?
- B. Should the business allowed under the partnership be restricted to
permit other ventures by the Partners, without a conflict of interest?
2. Management of the Partnership
- Is the Partnership to be operated and managed by the joint partners (owners)
or by a managing partner?
- If by managing partner, how many? Who? How selected? By vote of the owners?
- Are the partners to act as a board of directors, setting policy to be
implemented, or are they to be "hands on" operator-partners involved in day to
day decision making?
- Are there to be regular meetings of the partners?
- What authority does the managing partner have to act alone, and what requires
consent of all the partners?
- How much time are the partners required to devote to the enterprise?
- Can the partners participate in businesses or ventures which may conflict
with the interests of the partnership?
- Are any of the partners entitled to be paid?
- Who handles the finances? Who makes the financial decisions? What authority
does each partner have to make decisions or enter contracts which bind the
partnership?
3. Restrictions on Powers of Partners or Managing Partners:
- What limits are to be imposed on the ability of a partner to act without the
consent of other partners?
4. Transfer of Partner’s Interest ( Buy out)
Note: If a partner wants
out, he cannot be forced to remain a partner. If there is no agreement on buy
out, then any partner who wants out of the partnership may cause the dissolution
and liquidation of the partnership.
- A. What triggers the buy out?
- Bankruptcy, or assignments for the benefit of creditors, or judgment liens,
etc?
- Marital dissolution, or death of a spouse?
- Retirement, sickness for a specified period, or death?
- Withdrawal of a partner?
- B. Are there to be any restrictions on transfer of interest, to avoid
having the business owned by partners who cannot get along, or who are
unskilled? If so, what restrictions?
- Other partners have option to buy, or must buy?
- What is the option price? How is it determined.
- What is the option period?
- What are the terms of payment?
5. Dissolution ( Dissolving the Partnership )
- How are the affairs of the Company wound up, and its assets distributed?
Who has the responsibility for doing so?
[LLC Formation] [Corporation Formation] [Partnership Formation] [Business Buy-out]
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