What is the difference between a general partnership and a limited partnership?

In a U.S. general partnership, all partners manage the business and are personally liable for partnership debts. In a limited partnership, general partners run the business while limited partners are investors with liability limited to their investment. Limited partnerships require formal registration with the American state and are more complex than general partnerships.

What happens if partners disagree on major decisions?

A U.S. partnership agreement should specify decision-making procedures, including which decisions require unanimous consent and which require only majority approval. For disputes that cannot be resolved through negotiation, the American agreement should establish a clear dispute resolution process such as mediation or arbitration.

Can partnership ownership percentages be different from capital contributions?

Yes. U.S. partners may contribute different amounts of capital but allocate different ownership percentages. For example, one partner might contribute 50 percent of capital but have only 40 percent ownership. This arrangement must be clearly documented in the American partnership agreement.

Are partners personally liable for partnership debts?

In a U.S. general partnership, yes. Each general partner is personally liable for all partnership debts, meaning creditors can pursue each partner's personal assets. This is why it is critical to have a written American agreement addressing liability, insurance, and indemnification procedures.

What happens if a partner wants to leave the partnership?

A U.S. partnership agreement should specify how partners may exit the partnership, whether through buyout arrangements, dissolution, or other mechanisms. Without clear withdrawal provisions, an American partner's departure could trigger unwanted partnership dissolution or create disputes.

How are partnership profits taxed?

U.S. partnerships are pass-through entities. The partnership itself does not pay income tax; instead, profits are distributed to partners' personal tax returns according to their ownership percentages or as specified in the American partnership agreement. Partners report their share of income on Schedule K-1.

Can a partnership agreement be amended after it is signed?

Yes. U.S. partnership agreements can be amended, but amendments typically require unanimous partner consent or the percentage specified in the agreement. Amendments should be documented in writing and signed by all required American partners.

Legal & BusinessUnited States

Free Partnership Agreement Template

A professionally structured partnership agreement for US general partnerships. Define partner roles, capital contributions, profit sharing, and decision-making procedures. Customizable for any business type.

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GENERAL PARTNERSHIP AGREEMENT

Chenwilliams Digital Consulting - Effective April 1, 2026

PARTNER 1

David Chen

82 Harbor View, Seattle, WA 98101 (206) 555-0142 dchen@email.com Ownership: 55% | Capital: 55,000.00 USD

PARTNER 2

Sara Williams

14 Birch Lane, Bellevue, WA 98004 (425) 555-0198 swilliams@email.com Ownership: 45% | Capital: 45,000.00 USD

ChenWilliams Digital Consulting

Type: General Partnership · State: Washington · Effective: April 1, 2026

This General Partnership Agreement ("Agreement") is entered into as of April 1, 2026 by and between David Chen and Sara Williams (collectively, the "Partners"), who agree to form a general partnership under the Revised Uniform Partnership Act (RUPA) as enacted in the State of Washington (or, in jurisdictions that have not adopted RUPA, the Uniform Partnership Act (UPA) as enacted therein), for the purpose of conducting the business described herein.

FORMATION AND PURPOSE

The Partners hereby form a General Partnership under the laws of Washington, pursuant to RUPA § 202 (or the corresponding section of the state's partnership statute), to be known as "ChenWilliams Digital Consulting," effective April 1, 2026. The Partnership shall engage in: Providing digital marketing, SEO, and brand strategy consulting services to small and mid-size businesses. The Partnership shall have its principal place of business at 200 Pike Street, Suite 400, Seattle, WA 98101. The Partners acknowledge that, under RUPA § 201, a partnership is an entity distinct from its partners for most purposes (rejecting the strict aggregate theory), while for federal income tax purposes the Partnership is subject to the aggregate/conduit rules of I.R.C. § 761 and Subchapter K.

CAPITAL CONTRIBUTIONS

David Chen shall contribute 55,000.00 USD and Sara Williams shall contribute 45,000.00 USD to the Partnership as initial capital. Additional capital contributions may be made only by unanimous written agreement of all Partners. No Partner shall be required to make additional capital contributions beyond the initial amount stated herein. Each Partner's capital account shall be maintained in accordance with the substantial-economic-effect rules of Treasury Regulation § 1.704-1(b)(2), and the Partnership shall determine each Partner's share of items of income, gain, loss, deduction, and credit consistent with I.R.C. § 704 and the Treasury Regulations thereunder.

PROFIT AND LOSS DISTRIBUTION

Net profits and losses shall be allocated among Partners in proportion to their respective ownership percentages: David Chen (55%) and Sara Williams (45%). Distributions shall be made quarterly, or at such other times as all Partners may agree in writing. Consistent with the pass-through regime of I.R.C. § 701, the Partnership shall not itself be subject to federal income tax; each Partner shall separately report their distributive share of Partnership income, gain, loss, deduction, and credit on their individual federal income tax return pursuant to I.R.C. §§ 702 and 704, whether or not any actual distribution of cash has been made.

DECISION-MAKING AND MANAGEMENT

David Chen shall serve as Managing Partner, responsible for day-to-day operations. Routine operational decisions may be made by any Partner acting within the scope of their authority under RUPA § 301. Major decisions, including incurring debt exceeding 5,000.00 USD, hiring or terminating key employees, entering new business lines, admitting new partners, or selling material assets, shall require simple majority vote of all Partners pursuant to RUPA § 401(j). Each Partner owes to the Partnership and to the other Partners the fiduciary duties of loyalty and care set forth in RUPA § 404, including the duty to account for any property, profit, or benefit derived from the Partnership; to refrain from dealing with the Partnership as or on behalf of a party having an adverse interest; and to refrain from competing with the Partnership. These duties reflect the "punctilio of an honor the most sensitive" standard articulated in Meinhard v. Salmon, 249 N.Y. 458 (1928). Each Partner shall also discharge duties and exercise rights consistently with the obligation of good faith and fair dealing under RUPA § 404(d), which may not be eliminated by agreement.

PARTNER WITHDRAWAL AND BUYOUT

Any Partner wishing to withdraw (a "dissociation" under RUPA § 601) shall provide written notice to all other Partners at least 30 days in advance. Upon withdrawal, the withdrawing Partner shall be entitled to the value of their interest calculated by the book value of the withdrawing Partner's interest as reflected in the most recent financial records, consistent with the buyout-price framework of RUPA § 701. The buyout shall be paid within ninety (90) days of the agreed valuation date. A withdrawing Partner's interest may be purchased by the remaining Partners or by a qualified third party approved by remaining Partners. The dissociated Partner shall remain liable for Partnership obligations incurred before dissociation in accordance with RUPA §§ 703 and 704.

LIABILITY AND INDEMNIFICATION

Pursuant to RUPA § 306, each Partner is jointly and severally liable for all obligations of the Partnership arising in the course of its business, unless otherwise agreed by the claimant or provided by law. Consistent with RUPA § 401(c), the Partnership shall indemnify each Partner for liabilities reasonably incurred in the ordinary course of Partnership business or for the preservation of its business or property. Partners further agree to indemnify and hold harmless each other from claims arising from their individual unauthorized acts, breaches of the fiduciary duties of loyalty or care under RUPA § 404, gross negligence, or willful misconduct. The Partnership shall maintain adequate insurance coverage as determined by Partner agreement.

DISSOLUTION AND WIND-DOWN

The Partnership may be dissolved by unanimous written agreement of all Partners, or automatically upon a dissolution-triggering event enumerated in RUPA § 801, including the death, incapacity, or bankruptcy of any Partner (unless remaining Partners elect to continue within thirty (30) days under RUPA § 802). Upon dissolution, the Partners shall wind up the Partnership business under RUPA § 803, and Partnership assets shall be applied in the order prescribed by RUPA § 807: (1) payment of all Partnership debts and obligations to creditors, including Partners who are creditors; (2) repayment of capital contributions and settlement of partner accounts; (3) distribution of remaining assets to Partners in proportion to their respective capital-account balances or, as otherwise agreed, their ownership percentages.

DISPUTE RESOLUTION

Any dispute arising under this Agreement shall first be submitted to good-faith mediation in Washington before either Party may initiate legal proceedings. Mediation costs shall be shared equally among the disputing Partners.

ADDITIONAL PROVISIONS

Each Partner agrees not to engage in a directly competing business within the state of Washington for 12 months following withdrawal from the Partnership.

10.

GENERAL PROVISIONS

This Agreement constitutes the entire agreement among the Partners and supersedes all prior discussions, negotiations, and agreements. Amendments to this Agreement require unanimous written consent of all Partners. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. If any provision is found to be unenforceable, the remaining provisions shall remain valid and in full force and effect. This Agreement shall be binding upon and inure to the benefit of each Partner's heirs, legal representatives, successors, and assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date first written above.

PARTNER 1

David Chen

Date: ____________________

PARTNER 2

Sara Williams

Date: ____________________

What Is a Partnership Agreement?

A partnership agreement is a legal contract among two or more people who agree to run a business together. It defines each partner's role, capital contribution, profit and loss allocation, management responsibilities, and procedures for handling disputes. While many states do not legally require a partnership agreement, having one in writing is essential to clarify partner relationships and prevent misunderstandings that can lead to costly disputes.

Partnership agreements can establish either a general partnership, where all partners participate in management and share liability, or a limited partnership, where some partners are passive investors with limited liability. General partnerships are more common and simpler to set up, while limited partnerships require formal state registration and are typically used for investment structures.

In the United States, partnerships are governed by the Uniform Partnership Act (UPA) or the Revised Uniform Partnership Act (RUPA), depending on the state. A well-drafted partnership agreement supersedes default state law on most matters and provides clear guidance on ownership, decision-making, profit distribution, and partner withdrawal procedures.

What's Covered in This Template

Doxuno's partnership agreement template includes all core provisions required for US enforceability, plus expert sections for complex multi-partner structures and governance scenarios.

Partnership Name & Details

Partner Information

Capital Contributions

Ownership & Profit Sharing

Management & Decision-Making

Distributions & Drawings

Partner Liability

Partner Withdrawal & Buyout

Restrictions on Transfer

Dissolution & Liquidation

Amendment & Dispute Resolution

Governing Law & Taxes

How to Create Your Partnership Agreement

No legal background needed. Doxuno's template walks you through every section in minutes.

1
Enter partnership and partner details
Provide the official partnership name, principal place of business, and the full legal name and address of each partner. Specify each partner's role in the business.
2
Define capital contributions and ownership
Enter the amount and form of capital each partner is contributing (cash, property, services, etc.) and their corresponding ownership percentage.
3
Specify profit and loss allocation
Define how profits, losses, and distributions are allocated among partners. While this typically mirrors ownership percentage, partners may agree to different arrangements.
4
Configure management and decision-making
Establish which decisions require unanimous consent versus majority approval, set voting procedures, and clarify each partner's management responsibilities.
5
Set withdrawal and dispute procedures and sign
Define how partners may exit, procedures for buyouts, and dispute resolution mechanisms. Your completed partnership agreement generates as a professional PDF ready for all partners to sign.

Legal Considerations for US Partnership Agreements

While this template is designed to be valid across all U.S. states, there are several legal considerations worth understanding before you sign, particularly if your American partners are in different states or if your partnership involves complex arrangements.

This template is provided for informational purposes and does not constitute legal advice. For complex multi-partner structures, interstate partnerships, or if you are unsure about your state's specific requirements, consult a licensed attorney in your jurisdiction.

Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed attorneys in the United States to ensure accuracy and legal soundness for standard partnership scenarios.

General Partnership Liability

In a U.S. general partnership, each partner is personally liable for partnership debts and obligations. This means creditors can pursue each partner's personal assets to satisfy partnership debts. This is a major legal distinction from an American LLC or corporation and is why a written agreement clarifying liability and indemnification is essential.

Partnership Taxation

Partnerships are pass-through entities. The partnership itself does not pay income tax; instead, profits and losses pass through to partners' personal tax returns. Partners report their share of income on Schedule K-1 and are responsible for self-employment taxes on their distributive share.

Uniform Partnership Act (UPA) vs. Revised Uniform Partnership Act (RUPA)

Different states adopt different versions of partnership law. Some states follow the Uniform Partnership Act, while others follow the Revised Uniform Partnership Act. Your partnership agreement should specify which state law governs the partnership to avoid ambiguity.

Partner Withdrawal and Dissolution

Without a clear agreement, a partner's withdrawal can trigger involuntary dissolution of the entire partnership. Your partnership agreement should specify buyout procedures, valuation methods, and whether remaining partners may continue the business without complete dissolution.

Frequently Asked Questions

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