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The Minnesota partnership agreement is a legal document that defines all the details of how the business partners will operate within their business partnership. It defines their initial investment or contribution, rights, and responsibilities towards the business entity.
The partnership agreement, or the articles of partnership, is often used in the process of loan applications before financial institutions or in the process of business expansion. Third parties and potential investors will often require the partners to submit the partnership agreement so they can learn how the business partnership is organized.
In Minnesota, this document is also commonly referred to as the partnership contract or the partnership deed.
Minnesota Partnership Agreement Types
This section provides different types of partnership agreements that can be used in Minnesota:
Types of Partnership Agreement
General Partnership (GP): This type of partnership enables all partners to participate in the decision-making process. However, they all have unlimited liability for business operations with all of their personal assets. (Chapter 323A, §0101 to §1203)
Limited Partnership (LP): Here, the partnership is formed between one or more general partners, who have unlimited liability for the business operation and have decision-making powers, and one or more limited partners, who don’t have decision-making powers but have limited liability. (Chapter 321, §0101 to §1208)
Limited Liability Partnership (LLP): With this type of partnership agreement, all partners have equal authority to make decisions, and they are not liable for their partners' negligence. (Chapter 323A, § 1001 to § 1004)
Minnesota Partnership Agreement Requirements
In Minnesota, the partnership agreement format will include the following elements:
Mandatory Requirements
Information about the partners
Name and registered address of the partnership
Date of partnership formation and dissolution (if known at the moment of formation)
Details about each partner’s contribution to the partnership
Information about each partner’s management rights
Rules on profit distribution
Information about the accounts of the partnership
Conditions that must be fulfilled before the eventual partnership expansion
Rules on how the partners will cover eventual losses