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The Maryland partnership agreement is a legal document that establishes the rights and obligations of partners in a joint business venture.
The partnership agreement, or partnership contract, includes details on the initial investment of each partner in the business organization and, according to that, the decision-making and profit-sharing rights of each partner within the organization.
This provides transparency and security for both the business partners and any third party that is cooperating with the business partnership.
In Maryland, the partnership agreement is also commonly referred to as the partnership deed or articles of partnership.
Maryland Partnership Agreement Types
Maryland provides different types of business partnerships that partners can establish according to the nature of their business operations:
Types of Partnership Agreement
General Partnership (GP): The main feature of this type of partnership agreement is that all general partners participate in the decision-making process, and they all have unlimited liability for the business operations with all of their personal assets. (§9A-101 to §9A-1001)
Limited Partnership (LP): Here, the partnership is established 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. (§10-101 to §10-1105)
Limited Liability Partnership (LLP): This type of partnership enables all partners to make decisions. Moreover, their liability is limited only to the damages caused by their own actions. (§10-805)
Maryland Partnership Agreement Requirements
The Maryland partnership agreement format should include the following:
Mandatory Requirements
Names and mailing addresses of the partners
Information about the formation 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
Optionally, information on how the partnership will eventually be dissolved