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The Illinois partnership agreement is a legal document that establishes the rights and duties of partners in a joint business effort.
The partnership agreement, or the partnership deed, includes details on the contribution of each partner to the business entity and, according to that, the management and voting rights of each partner within the entity. This will provide transparency both for the partners and for any third party that is cooperating with the business entity.
In Illinois, the partnership agreement is also commonly referred to as the articles of partnership or the partnership contract.
Illinois Partnership Agreement Types
Illinois provides different types of business partnerships that the business partners can establish according to the nature of their businesses:
Types of Partnership Agreement
General Partnerships (GP): Here, all general partners participate in the decision-making process, and they all have unlimited liability for the business entity with all of their personal assets. (§ 215/401 — 215/408)
Limited Partnership (LP): This is the partnership between the limited partners, who are not authorized to make decisions but have limited liability, and the general partners, who are authorized to make decisions but have unlimited liability. (§ 215/0.01 — 215/1402)
Limited Liability Partnership (LLP): With this type of partnership, all partners are authorized to make decisions, and they are liable only for the damages caused by their own actions. (§ 206/1001 — 206/1005)
Illinois Partnership Agreement Requirements
The Illinois partnership agreement format should include the following:
Mandatory Requirements
Names and mailing addresses of the partners
Information about the beginning and end of the partnership
Details on the initial contributions of each partner
Description of each partner's role in the partnership
Information on each partner's managing or voting rights
Details on how the profits are distributed between the partners
Information on how the eventual business losses will be covered