Partnership Agreement
(Short Form) (CA GP)

Summary

This is a template for a general partnership agreement (short form) (CA) that is meant for a general partnership formed for a defined business purpose and specifies California as the governing law. This template includes practical guidance, drafting notes, and alternate clauses. This agreement should be used only in situations where a general partnership is desired and where a short form agreement is appropriate. A short form agreement may be sufficient in situations where the partnership consists of a small number of close individuals who prefer a less formal agreement. A long form general partnership agreement is advisable in most situations between partners contracting at arms-length to ensure the material terms of the partnership are memorialized in writing. Counsel should note that a general partnership is not an incorporated business entity and will not provide the limitations on partner liability available to a limited partnership, LLC, or corporation. There are few statutory restrictions that govern the terms of a general partnership agreement, thus modify the terms set forth herein according to the client's needs. This template has been updated as needed to reflect the revised Internal Revenue Code provisions governing IRS tax audits of partnerships and other entities taxed as partnerships; these rules were passed in the Bipartisan Budget Act of 2015 and took effect on January 1, 2018. For further information, see Partnership Tax Audit Rules. See also Partnership and Other Pass-Through Entities Taxation and Partnership Tax Audit Clauses (Bipartisan Budget Act of 2015). For more information on general partnerships in California, see General Partnerships (CA).