What is a Partnership Agreement?
A partnership agreement is a legally binding contract between individuals carrying on business together without a company. It governs profit sharing, decision-making, liability, and exit rights.
Partnership Agreement vs Shareholders Agreement
If your business is run through a company, read our guide to Shareholders Agreements in WA.
If you operate without a company, a partnership agreement is essential.
Why Partnership Agreements Matter in WA
Under the Partnership Act 1895 (WA), partners are personally liable for business debts unless they agree otherwise. A partnership agreement allows partners to tailor these rules.
What Happens Without a Partnership Agreement?
Without a written agreement, partners are exposed to equal liability, equal profit sharing, and statutory decision-making rules — regardless of contribution.
Key Clauses in a Partnership Agreement
- Capital contributions
- Profit and loss sharing
- Management authority
- Exit and dissolution
- Dispute resolution
Operating through a company? See our Shareholders Agreement guide.
Not sure which structure applies? Speak with our business lawyers today. Please get in touch with us on 08 6114 5920 or email info@barnardlawyers.com.au.
Please note: This article provides general information only and does not constitute legal advice.