How does a Partnership Operate?

A partnership agreement is a legal agreement that dictates the Partnership's operations.

合伙协议是合伙企业规定运作的一项法律协议。

While this is not mandatory by the Partnership Act 1961, avoiding a partnership agreement can lead to significant complications in the future.

Contents in Partnership Agreement

Since a formal agreement is not required, there is no clear list of what it should include, but it usually covers the followings:-

• Contribution to capital

• Management of the business

• Distribution of profits

• Apportionment of losses

• Remuneration for acting in the partnership business

• Introduction of the new partner

• Change in the nature of the partnership business

• Partnership property

If the partnership agreement is silent or in the absence of a partnership agreement, then the rights of the partners are implied from the provisions of the Partnership Act 1961.

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