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The South Dakota partnership agreement is a legal document that defines and formalizes the rights and responsibilities of the business partners in their common business venture.
The partnership agreement or partnership contract includes information about each partner’s contribution to the partnership, their liabilities, the decision-making process, profit sharing, and more. This provides transparency and stability in the partnership’s operation.
Moreover, this document is often required by third parties in the process of business expansion or the application for a business loan.
The partnership agreement is also commonly referred to as the “partnership deed” or the “articles of partnership.”
South Dakota Partnership Agreement Types
This section provides a list of all partnership agreement types used in South Dakota:
Types of Purchase Agreement
General Partnership (GP): Here, all partners are able to participate in a decision-making process. However, when it comes to liability, they are all liable for the business operations with all of their personal assets. (§ 48-7A-901 to § 48-7A-903, and § 48-7A-906)
Limited Partnership (LP): This is a business partnership between one or more general partners, who have unlimited liability for the business operations and have decision-making powers, and one or more limited partners, who don’t have decision-making powers but have limited liability for the business operations. (§ 48-7A-901 to § 48-7A-908)
Limited Liability Partnership (LLP): The main feature of this type of business partnership is that all partners make decisions equally, and they are not liable for damages caused by the actions of other partners. (§ 48-7A-1001 to § 48-7A-1004.1)
South Dakota Partnership Agreement Requirements
In South Dakota, the partnership agreement format should include the following:
Mandatory Requirements
Full names and mailing addresses of business partners
Information on what type of business partnership is established
Details on the registered business activity of the partnership
Date of the partnership establishment
Rules on how the business entity will be managed
Details on how the profits are shared between the partners
Requirements that must be met before the partnership expansion
Information on the accounts of the business partnership