Partnership agreements are used to regulate the manner in which the business of a partnership will be carried on and to regulate the relationship of the partners as owners of that business. A properly drafted partnership agreement will have a number of specific benefits and will set out:

• the nature of the business to be pursued by the partnership;
• the name under which the partnership will trade;
• the duration of the partnership;
• the manner in which partners will contribute capital to the partnership;
• the manner in which partners will share in the profits and losses of the partnership and be entitled to withdraw profits from the partnership;
• the manner in which the partnership will be managed and how decisions will be made;
• the obligations and duties of each of the partners;
• the accounts to be kept by the partnership;
• the manner in which disputes between the partners will be resolved;
• what happens when a partner resigns, becomes incapacitated, dies or is expelled; and
• how the partnership property is divided upon a winding up or dissolution of the partnership.

There are of course numerous other benefits associated with having a partnership agreement. If a partnership agreement is not put in place, the default provisions set out in the Partnership Act 1890 will apply to the partnership. These provisions can be inappropriate in most circumstances.