Offices in 
Chat Live With Us
Many partnerships begin with a handshake between friends, relatives, or colleagues who trust each other. That trust matters, but it doesn’t answer what happens when partners disagree, one partner wants to leave, or the business takes on debt. At Puff, Sierzega & MacFeeters, our business law attorneys help partners in Woodbury, Pitman, Glassboro, and throughout Gloucester County create written partnership agreements that protect the business and the people behind it.
You May Already Be in a Partnership
Under New Jersey’s Uniform Partnership Act, a partnership is generally formed when two or more people carry on a business together as co-owners for profit, whether or not they intended to form a partnership. No filing is required. Two contractors who share jobs and profits, or siblings who run a small retail shop together, may already be partners in the eyes of the law.
If the partnership does business under a name that does not include the partners’ names, New Jersey generally requires a trade name certificate to be filed with the county clerk. In Gloucester County, partners file that certificate with the Gloucester County Clerk in Woodbury.
Default Rules Without a Written Agreement
When partners have no written agreement, New Jersey’s default rules apply. Under those rules:
- Partners generally share profits and losses equally, regardless of how much each contributed
- Each partner generally has an equal right to manage the business
- Partners are generally personally liable, jointly and severally, for partnership obligations
- A partner’s departure can trigger buyout, dissociation, or dissolution issues depending on the agreement and circumstances
These defaults rarely reflect what partners expect, especially when one partner invested more money or works more hours than the other.
What a Partnership Agreement Should Include
A carefully drafted partnership agreement replaces the default rules with terms that fit your business. It typically addresses:
- Capital contributions from each partner
- How profits, losses, and draws will be divided
- Management authority and voting rights
- Responsibilities and time commitments of each partner
- What happens if a partner dies, becomes disabled, divorces, or wants to leave
- How a departing partner’s interest will be valued and paid
- Restrictions on competing with the partnership
- Dispute resolution procedures, such as mediation or arbitration
Partners also owe each other duties of loyalty and care. A partnership agreement can define how those duties apply, but it cannot eliminate them.
Choosing the Right Type of Partnership
New Jersey recognizes several partnership structures, and the choice affects personal liability:
- General partnership: Each partner may be personally responsible for the partnership’s debts.
- Limited liability partnership (LLP): An LLP is registered with the state and generally protects partners from personal liability for partnership obligations.
- Limited partnership: At least one general partner manages the business, and the limited partners’ liability is generally limited to their investment.
Our attorneys can explain whether a partnership, an LLC, or another structure best fits your goals.
How Our Gloucester County Business Attorneys Can Help
Our firm has served Gloucester County business owners since 1978. Our attorneys can draft a new partnership agreement, review an existing one, or help partners update their terms as the business grows. If a disagreement has already developed, we can also help partners work toward a resolution.
Talk to a Gloucester County Partnership Agreements Lawyer
A written agreement is easier to create while partners are still on good terms. Call 856-845-0011 today or contact us online to schedule a consultation with our team.