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The Rhode Island partnership agreement is a legal document that outlines the essential details of the relationship between the partners within the business entity.
Partners often choose to create a partnership agreement or partnership deed to minimize the possibility of any misunderstandings and disputes in the future since the document provides all the guidelines or important information about the business partnership operation.
These are usually the details about each partner’s initial contribution to the business partnership, their management and voting rights, and their profit share.
The Rhode Island partnership agreement is also called the partnership contract or the articles of partnership.
Rhode Island Partnership Agreement Types
In Rhode Island, partners can choose between the various types of partnership agreements:
Types of Purchase Agreement
General Partnership (GP): Here, all partners are able to participate in the decision-making process. However, they all have unlimited liability for the operations of the business entity with all of their personal assets. (Section 7-12-1 to Section 7-12-60)
Limited Partnership (LP): This is the partnership between one or more general partners, who can make decisions and have unlimited liability for the business operations, and one or more limited partners, who are not able to make decisions but have limited liability. (Chapter 7-13.1)
Limited Liability Partnership (LLP): Here, all partners equally participate in the decision-making process. Moreover, they are all protected from liabilities caused by the actions of other partners. (Chapter 7-12.1, Article 9)
Rhode Island Partnership Agreement Requirements
The Rhode Island partnership agreement format should include the following:
Mandatory Requirements
Details about the partners
Information about the date of formation of the partnership
Details on the initial contribution 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
Details on the business accounts of the partnership