Facts about the Partnership Agreement template

Contents

What is a Partnership Agreement Amendment?

A partnership agreement amendment is a document used to change, remove or add terms to an existing partnership agreement. When entering into a partnership, an agreement outlines business details, partner details, partnership interest, financial and tax responsibilities and how business decisions will be made. In general, an agreement helps clarify roles, sets expectations and helps prevent disputes. However, as the business grows and changes, it is often necessary to change some of the details. An amendment takes care of this without having to write a brand new partnership agreement.

Some other terms for a partnership agreement amendment are general partnership amendment, amendment to partnership contract, 50/50 partnership amendment and partnership addendum. In general, an amendment includes the contact information of the partners, the reason for the changes and all specific modifications. These may include a change in roles, a new rule, additional investments or profit distribution changes.

In a business, the specific partners may change as well. One partner may leave, or perhaps the company takes on an additional partner. If the majority of the other terms remain the same, there is no need to compose an entirely new agreement. A partnership agreement amendment takes care of it while keeping the original provisions in place. Once the amendment is signed by all parties, it should be attached to the original partnership agreement.

What is a Partnership Agreement Amendment used for?

A partnership agreement amendment is used when there needs to be changes made to the original agreement. The addendum may include modifications as well as new additions or deletions. An addendum to the original contract prevents the involved parties from being hooked to an impractical or dated agreement while allowing for a changing business climate. An agreement amendment can also clear up any questionable language that is contained in the original document or clarify any potential issues. An amendment can add new partners, outline the exit of an original partner or redefine the roles of all partners.

Why should you use a Partnership Agreement Amendment?

Businesses change with the times, and partnerships are no different. Just like a partnership agreement is necessary for legal protection in the event there are issues, an amendment is necessary when there are changes to the partnership or company. Without an amendment, provisions in the original agreement will apply, or the solution is determined by the state’s rules on partnerships

Even discussing a potential amendment is helpful because it allows the partners to have continuing dialogue about changes in the company. This helps catch problems before they become serious, leaves room for creative strategizing, allows for better and faster growth and makes for a successful business relationship. Without an amendment, relationships can become stale and outdated.

How to write a Partnership Agreement Amendment?

A partnership agreement amendment is legally binding, so it is important to include all the necessary components. Every partnership is different, so the exact language and content will vary, but there are some basic elements that all of them should contain.

  • Partner information:

    Include the names and contact information for all of the original partners.

  • Location of business:

    Note the address of the partnership’s company as well as the business entity.

  • Purpose of the amendment:

    This section explains what the partners want to accomplish and why the amendment is necessary.

  • Changed provisions:

    This is where you provide the specific changes you are making to the original agreement. Include the section and subsection number that will be changed and write the new language. Examples of common modifications include a change or addition of partners, additional capital contribution, modification for loss and profit distribution, new oversight policies and changes regarding the company’s financial institution.

  • Effective date:

    This states when the amendment takes effect and outlines that it will be effective for the same term as the original agreement.

  • List of other amendments:

    If there are previous amendments, it is good to note it in this section.

  • Governing law:

    This declares in which state the business is located in the event there is a dispute and the state’s law applies.

  • Original agreement continuance:

    This section states that except for the section the amendment modifies, the other terms of the original agreement stay in effect.

How to Fill Out a Partnership Agreement Amendment with PDFSimpli in Five Steps

  • 1. Prepare the information to include in the agreement:

    Before writing the amendment, think about your goals and what you want to accomplish with the document. Because it involves all partners, everyone should be clear about what to include and the language to use because you do not want to confuse anyone or invalidate the original agreement. Clarify all the terms and make sure all parties agree.

  • 2. Choosing a Software for your needs:

    If you prepare properly, writing the actual amendment should be easy. It is even easier and quicker when you take advantage of one of the many templates available. However, not all software programs are created equal, and some are more challenging to use. Fortunately, PDFSimpli is user friendly and it provides numerous benefits, such as save as you go and the ability to return to the documents later for completion.

  • 3. Edit or fill out the partnership agreement amendment:

    Sit down with your prepared notes and begin to fill in the form. PDFSimpli conveniently highlights the areas where you can enter information, which takes away any confusion. If you do not love the language used in the template, you can modify it. You can also add additional sections or lines if necessary.

  • 4. Review the document

    All involved parties should review the amendment. Ample time should be given, as everyone should understand the new terms and how they affect the original document, which helps reduce the chances of legal issues later on. Double check the spellings of names and ensure that everything is stated clearly to eliminate any confusion or unreasonable expectations.

  • 5. Save, Download, Print or send for electronic signature:

    Once everyone reviews and agrees on the final document, save and download it. If the partners are in the same location, print the agreement out for signatures. If one or more of the partners are in different locations, PDFSimpli allows you to send it electronically for a signature. You may also want to get witness signatures or notarization. Make sure you attach the amendment to the original agreement.

Partnership Agreement Amendment Frequently Asked Questions

There is no limit as to the number of amendments you can make to the original partnership agreement. However, you must note in the current partnership agreement amendment that there have been previous amendments, as this ensures that the agreement is up to date. All previous amendments should also remain attached to the original agreement.

Again, you can have as many amendments as you need, but you should not make an amendment to a previous amendment, as this cancels out the original change. Instead, always amend the original partnership agreement when changes, additions or deletions are necessary.

If you are changing the majority of the original agreement, or your edits are major, filling out an amendment form may not be the right move. In this case, it may be a better idea to draft a new partnership agreement.

An original partnership agreement can also get bogged down if there are a large number of previous amendments. Instead of adding even more, a new agreement may make things clearer and more understandable.

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