Also known as: article of partnership · partnership agreement
Written by attorneys · grounded in primary & secondary sources — see below
A contract among partners that defines their mutual rights and duties.
Ava Adebayo and Ariana Azizi signed articles of partnership for a ten-year tutoring venture that barred any partner from withdrawing before year six without unanimous written consent. In year three Ava emailed notice of withdrawal to accept an overseas post. The remaining partners sued for damages, alleging the email breached the express restriction in the articles.
Austin Abbott formed a limited partnership with Alexis Archer under articles that entitled each limited partner to milestone distributions. When Archer diverted partnership funds to a personal venture, Abbott sued Archer directly for an accounting and recovery of the diverted sums.
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Amelia Amari and Andrew Avery converted their general partnership to a limited liability partnership by filing the required statement. After the conversion a supplier sued Avery personally for a partnership debt incurred during the LLP period. The court dismissed the personal claim, holding that the liability shield applied despite any inconsistent provision in the articles.
Aether Technologies partners included a clause in their articles requiring three months' written notice before withdrawal and conditioning any post-withdrawal practice restriction on a revocation request by the executive committee. One partner gave notice, refused the committee's revocation request, and began competing. The remaining partners sued to enforce the conditional restriction contained in the articles.
Astra Aerospace partners kept joint financial ledgers under their articles. When one partner faced a subpoena for those records, the court held that the articles created a collective entity whose records were not the partner's private papers.
Aurora Biotech's articles authorized specific capital contributions and profit shares and fixed $50,000 liquidated damages for breach of a non-compete. After one partner left and began competing, the remaining partners sought both an injunction and damages. The court held that the liquidated-damages clause did not preclude injunctive relief.
A person who becomes a partner is deemed to assent to the partnership agreement. When an admission agreement references the earlier document and the new partner accepts distributions and performs services, the partner is bound by its terms including any indemnity clause.
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Dissociation is wrongful if it breaches an express provision of the partnership agreement. A written bar on withdrawal before year six without unanimous written consent makes an email withdrawal in year three wrongful even if the partner believed an informal conversation sufficed.
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A partnership agreement may not alter or eliminate the duty of care. A clause purporting to shield partners from liability for negligent navigation or operational decisions is unenforceable because the statute withholds power to contract away that duty.
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The duty of loyalty requires a partner to account to the partnership for any profit or benefit derived from the conduct of partnership business. Rebates or licensing revenue obtained through partnership purchases or resources must be turned over to the partnership.
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…compensation” appears easier than the proof which would establish bad faith or plain abuse of discretion. [^maj-15]: The partnership agreement may control the amount and timing of distribution in a way which is disadvantageous to the retiring partner. [^maj-16]: We do not limit our holding to majority stockholders. In the close…