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The North Carolina partnership agreement is a legal document that governs all the activities of partners inside the business partnership to enable smooth collaboration within the business entity.
Federal and state laws often don’t provide detailed provisions for business partnerships, leaving it to the partners to customize them according to their specific business model by creating the partnership agreement.
The main benefit of having a partnership agreement is that it provides more stability for the business entity and prevents misunderstandings and potential disputes between the business partners.
The North Carolina partnership agreement is also called:
Partnership Agreement Synonyms
North Carolina partnership contract
North Carolina articles of partnership
North Carolina partnership deed
North Carolina Partnership Agreement Types
North Carolina 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. (§ 59-31 to § 59-94)
Limited Partnership (LP): Here, the partnership is established between one or more limited partners that are not authorized to make decisions but have limited liability for the business operation and one or more general partners that are authorized to make decisions but have unlimited liability for the business operation. (§ 59-101 to § 59-1107)
Limited Liability Partnership (LLP): This type of partnership enables all partners to participate in the decision-making process. Moreover, their liability is limited only to the damages caused by their own actions. (§ 59-84.2 to § 59-84.5)
North Carolina Partnership Agreement Requirements
The North Carolina partnership agreement format should include the following:
Mandatory Requirements
Details about the business partners
Information about the business activities of the business entity
Details on initial investment of each partner
Rules on how the business entity will be managed
Information on how the profits are shared between the partners
Details on the accounts of the business partnership
Rules on how the partners will cover eventual business losses
Optionally, information on how the partnership will eventually dissolve