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The Michigan partnership agreement is a legal document drafted between two or more business partners to define their rights and responsibilities in the business venture they are establishing.
Partnerships are usually established between partners that have different resources that can be joined together, such as know-how, capital, or equipment.
The partnership agreement, or partnership contract, is particularly useful in these situations since it enables the partners to define what each partner's initial contribution is to the business and determines their management rights and profit share based on that contribution.
In Michigan, the partnership agreement is also often called the partnership deed or the articles of partnership.
Michigan Partnership Agreement Types
Here, you can find different partnership agreement types used in Michigan:
Types of Partnership Agreement
General Partnership (GP): With this type of partnership, all partners are able to participate in a decision-making process, and they all have unlimited liability for the business operations with their personal assets. (§ 449.1 to § 449.155)
Limited Partnership (LP): This is the partnership between the general partners, who have unlimited liability for the business operations and are able to make decisions, and the limited partners, who are not able to make decisions but have limited liability for the business operations. (§ 449.1101 to § 449.2108)
Limited Liability Partnership (LLP): Here, all partners can equally make decisions, and they are liable only for actions they have personally taken within the partnership. (§ 449.44 to § 449.48)
Michigan Partnership Agreement Requirements
The Michigan partnership agreement format should include the following:
Mandatory Requirements
Information about the partners
Details about the beginning of the business partnership
Information about the initial contributions of each partner
Description of each partner's role in the partnership
Information about each partner’s management or voting rights
Rules on how the profits are distributed between the partners
Rules on how the eventual business losses will be covered
Details on how the partnership will eventually dissolve