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The Vermont partnership agreement is a legal document that serves as the formalization of the agreement between two or more partners with the common goal of establishing a business partnership.
The partnership agreement, or the articles of partnership, usually include information about partners, their initial contribution to the partnership, and their management, voting, and profit-sharing rights based on their contribution. This prevents potential misunderstandings and disputes between the partners.
The partnership agreement is also referred to as the partnership contract or the partnership deed.
Vermont Partnership Agreement Types
In Vermont, there are different types of partnership agreements that partners can choose from:
Types of Purchase Agreement
General Partnership (GP): This type of partnership agreement 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. (§ 4141)
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. (§ 3401 to § 3503)
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. (§ 4141)
Vermont Partnership Agreement Requirements
The Vermont 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