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                                             PARTNERSHIP AGREEMENT

 

 

 

                AGREEMENT made ____________, 19__ between

        ______________________ and ________________ of ____________.

 

                1.  NAME AND BUSINESS.  The parties hereby form a

        partnership under the name of ___________________ to conduct a

        _______________________.  The principal office of the business

        shall be in _____________________.

 

                2.  TERM.  The partnership shall begin on ___________,

        19__, and shall continue until terminated as herein provided.

 

                3.  CAPITAL.  The capital of the partnership shall be

        contributed in cash by the partners as follows:

 

 

                A separate capital account shall be maintained for each

        partner.  Neither partner shall withdraw any part of his capital

        account.  Upon the demand of either partner, the capital accounts

        of the partners shall be maintained at all times in the

        proportions in which the partners share in the profits and losses

        of the partnership.

 

 

                4.  PROFIT AND LOSS.  The net profits of the partnership

        shall be divided equally between the partners and the net losses

        shall be borne equally by them.  A separate income account shall

        be maintained for each partner.  Partnership profits and losses

        shall be charged or credited to the separate income account of

        each partner.  If a partner has no credit balance in his income

        account, losses shall be charged to his capital account.

 

 

                5.  SALARIES AND DRAWINGS.  Neither partner shall receive

        any salary for services rendered to the partnership.  Each

        partner may, from time to time, withdraw the credit balance in

        his income account.

 

 

                6.  INTEREST.  No interest shall be paid on the initial

        contributions to the capital of the partnership or on any

        subsequent contributions of capital.

 

 

                7.  MANAGEMENT DUTIES AND RESTRICTIONS.  The partners

        shall have equal rights in the management of the partnership

        business, and each partner shall devote his entire time to the

        conduct of the business. Without the consent of the other partner

        neither partner shall on behalf of the partnership borrow or lend

        money, or make, deliver, or accept any commercial paper, or

        execute any mortgage, security agreement, bond, or lease, or

        purchase or contract to purchase, or sell or contract to sell any

        property for or of the partnership other than the type of

        property bought and sold in the regular course of its business.

 

                8.  BANKING.  All funds of the partnership shall be

        deposited in its name in such checking account or accounts as

        shall be designated by the partners.  All withdrawals therefrom

        are to be made upon checks signed by either partner.

 

 

                9.  BOOKS.  The partnership books shall be maintained at

        the principal office of the partnership, and each partner shall

        at all times have access thereto.  The books shall be kept on a

        fiscal year basis, commencing ______ and ending _______, and

        shall be closed and balanced at the end of each fiscal year. An

        audit shall be made as of the closing date.

 

 

                10.  VOLUNTARY TERMINATION.  The partnership may be

        dissolved at any time by agreement of the partners, in which

        event the partners shall proceed with reasonable promptness to

        liquidate the business of the partnership.  The partnership name

        shall be sold with the other assets of the business.  The assets

        of the partnership business shall be used and distributed in the

        following order: (a) to pay or provide for the payment of all

        partnership liabilities and liquidating expenses and obligations;

        (b) to equalize the income accounts of the partners; (c) to

        discharge the balance of the income accounts of the partners; (d)

        to equalize the capital accounts of the partners; and (e) to

        discharge the balance of the capital accounts of the partners.

 

 

                11.  DEATH.  Upon the death of either partner, the

        surviving partner shall have the right either to purchase the

        interest of the decedent in the partnership or to terminate and

        liquidate the partnership business.  If the surviving partner

        elects to purchase the decedent's interest, he shall serve notice

        in writing of such election, within three months after the death

        of the decedent, upon the executor or administrator of the

        decedent, or, if at the time of such election no legal

        representative has been appointed, upon any one of the known

        legal heirs of the decedent at the last-known address of such

        heir.

 

                (a)  If the surviving partner elects to purchase the

        interest of the decedent in the partnership, the purchase price

        shall be equal to the decedent's capital account as at the date

        of his death plus the decedent's income account as at the end of

        the prior fiscal year, increased by his share of partnership

        profits or decreased by his share of partnership losses for the

        period from the beginning of the fiscal year in which his death

        occurred until the end of the calendar month in which his death

        occurred, and decreased by withdrawals charged to his income

        account during such period.  No allowance shall be made for

        goodwill, trade name, patents, or other intangible assets, except

        as those assets have been reflected on the partnership books

        immediately prior to the decedent's death; but the survivor shall

        nevertheless be entitled to use the trade name of the

        partnership.

 

                (b)  Except as herein otherwise stated, the procedure as

        to liquidation and distribution of the assets of the partnership

        business shall be the same as stated in paragraph 10 with

        reference to voluntary termination.

 

 

                13.  ARBITRATION.  Any controversy or claim arising out

        of or relating to this Agreement, or the breach hereof, shall be

        settled by arbitration in accordance with the rules, then

        obtaining, of the American Arbitration Association, and judgment

        upon the award rendered may be entered in any court having

        jurisdiction thereof.

 

                In witness whereof the parties have signed this

        Agreement.

 

 

                                        _______________________________

 

 

                                        _______________________________