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Solution for Business Law 3rd Edition Chapter 10, Problem 2

by Nickolas James
128 Solutions 13 Chapters 14653 Studied ISBN: 9780730305743 Business Law 5 (1)

Chapter 10, Problem 2 : 2.Draft a brief partnership agreement between Johnny and...

2.Draft a brief partnership agreement between Johnny and Ash according to which they will share equally in financial contribution and the sharing of profits, Johnny will be responsible for the manufacturing of the organic cola and Ash will be responsible for marketing and distribution. Include whatever other terms you consider to be fair and appropriate.

 

Step-By-Step Solution

See Business Lawpp504-513.

The following is an example of a brief partnership agreement:

 

  1. Johnny Bristol and Ashwina Redcliffe agree to be partners (‘the partners’).
  2. The partners will conduct business under the business name ‘Organicola’.
  3. The type of business will be the manufacture and sale of organic cola and other organic foods.
  4. The partnership will continue until one or both of the partners decide to terminate the partnership.
  5. Each partner will contribute $___ to the establishment of the business.
  6. Each partner will own a fifty per cent share in the business.
  7. Each partner will be entitled to receive interest on their capital contribution at the rate of __% per annum.
  8. Profits and losses will be shared equally by the partners.
  9. Each partner can draw upon annual profits during the year up to a maximum amount of $___ per annum. Interest is not payable on these advances.
  10. In addition to sharing in the profits each partner is entitled to a salary of $___ per annum.
  11. Each partner is liable for debts, liabilities and other obligations incurred by the other partner in the course of the partnership business.
  12. All decisions relating to the business must be unanimous.
  13. Johnny Bristol will be responsible for management of the manufacturing of the organic cola and other foods, and Ashwina Redcliffe will be responsible for marketing and distribution of the products of the business.
  14. Additional partners can only be introduced to the partnership with the consent of both partners.
  15. In the event that one of the partners dies, is declared bankrupt, or elects to retire from the business the remaining partner may purchase their share of the partnership at market value.
  16. In the event of a dispute between the partners that cannot be resolved by negotiation, the partners will seek to resolve the dispute using mediation, and will have recourse to litigation only as a last resort.

 

 

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