What does a partnership agreement cost? This is a question many business partners ask when they are looking to formalize a business partnership. So let’s explore this question and review some general information about business partnership agreements.
How Much Does a Business Partnership Agreement Cost?
A business partnership agreement is a legally binding contract executed by two partners that start a business together. This legal agreement outlines business practices for the company and the role each partner will play in running the business. Information that a business partnership agreement establishes can include:
- Company management structure
- Ownership percentages of each partner
- Profit and loss distribution
- Partner roles and responsibilities
It is common for business partners to seek help from a business partnership agreement lawyer to draft this contract. Business partnership agreements are important documents that outline how a business partnership will run and are critical to a company’s success. In addition, business partnership agreements are used to outline terms between partners to avoid future business disputes clearly, so they must be drafted correctly.
Based on ContractsCounsel’s marketplace data, the average cost of a project involving a business partnership agreement is $770.86.
Business partnership agreement costs usually depend on variables like the service requested, the number of partners in the agreement, and the number of custom terms the partners want.
What’s Included in a Business Partnership Agreement?
The contents of a business partnership agreement will vary based on the type of company, the number of partners, and the custom terms added. Even though these documents are highly customizable, the following terms are typically included in business partnership agreements.
- Business Name. The company’s legal name must be in the agreement.
- Business Purpose. The contract should describe the company's service or product to clients and customers.
- Partner’s Information. The name and title of each partner must be included.
- Capital Contributions. This section details how much capital each partner will be contributing to the business.
- Ownership. Each partner will own a specific percentage of the company, which should be recorded in the agreement.
- Profit and Loss Distribution. A provision that explains how profits and losses will be divided between partners.
- Company Management Structure. This will detail the roles and responsibilities of each partner and how the company will be managed.
- Voting. The agreement should establish how the company handles voting on issues.
- Adding or Removing Partners. All partnership agreements should lay out conditions and protocols for adding or removing partners from the partnership.
- Dissolution. This section establishes how the company will be dissolved if the partners decide to close the business.
Types of Business Partnerships
There are several types of business partnership structures. The structure you choose will depend on the needs of the company and the partners. Depending on the structure, different terms may need to be added to the business partnership agreement.
The most common types of business partnerships include:
- General Partnership. In a general partnership, all partners equally share liabilities, profits, and assets.
- Limited Partnership. Limited partnerships are usually established if partners do not plan to contribute the same amount of capital. In limited partnerships, the partners that contribute more capital will benefit more from the business performance.
- Limited Liability Partnership. A limited liability partnership gives partners limited personal liability while maintaining equal shares in the company.
Examples of Business Partnership Agreement Projects
Business Partnership Agreement Drafting Service
A knowledgeable lawyer will provide drafting services to business partners who need a business partnership agreement. Only a lawyer experienced with business contracts can ensure that an agreement contains all necessary terms and is legally binding.
When partners hire a lawyer to draft their contract, the lawyer will typically consult with the partners to learn about the terms they want to include in the agreement. Then, the lawyer will draft a business partnership agreement template to make sure it includes everything the business needs. The cost of business partnership agreements will vary based on the length and complexity of the document.
Business Partnership Agreement Review Service
Sometimes, partners already have a business partnership agreement, but it may need to be revised or completed before signing. These partners would hire a lawyer for review services.
During review services, an attorney will review the agreement to ensure it meets all legal contract standards for local and state laws. In addition, they will ensure the contract is fair, includes all pertinent information, and add any clauses or provisions that may be missing.
Additional reasons you may want a lawyer to review a business partnership agreement include:
- To ensure the agreement fits the needs of the business
- The agreement needs to be updated with new terms
- One partner wants the document independently reviewed to ensure fairness
- There are questions about the terms and conditions
- There has been a change in the partnership structure
Business Partnership Agreement Drafting Cost
Drafting a business partnership agreement will come with costs because it requires a licensed lawyer's time and legal expertise.
ContractsCounsel’s marketplace data shows the average business partnership agreement drafting costs to be $821.00 across all states and industries.
Business Partnership Agreement Review Cost
Hiring a lawyer to review a partnership agreement will also come with fees. Still, they are generally less than drafting fees. The lawyer will still need to read over the agreement and make necessary revisions.
ContractsCounsel’s marketplace data shows the average business partnership agreement review costs to be $706.43 across all states and industries.
How Do Business Partnership Agreement Lawyers Charge?
Business lawyers can charge for legal services in several ways. The two most common fee structures that business lawyers use are hourly rate and flat feed. The fee structure will usually depend on the complexity of the project.
Hourly Rate for Business Partnership Agreements
Business lawyers often bill their time using an hourly rate structure. The lawyer has a set hourly rate, and they will log time in a timesheet while working on a client’s case or project. The client will then be billed at the completion of the job. This is typically the safest way for the lawyer to charge clients. If the project takes more time than expected, they are compensated.
ContractsCounsel’s marketplace data shows the average hourly rate for a business lawyer ranges from $250 - $350 per hour.
Flat Fee Rates for Business Partnership Agreements
A flat fee billing structure is becoming more common for contract drafting projects like a business partnership agreement. A lawyer will provide a flat-fee quote to the client for the requested legal services in this fee structure. This fee is generally paid upfront before work commences.
It is important to ensure the client knows what services are included with the fee before starting the project. For example, additional consultations, communications, and revisions could incur more legal fees.
ContractsCounsel’s marketplace data shows the average flat fee rate for partnership agreement costs to be $770.86.
Get Help with a Business Partnership Agreement
Do you need help with a business partnership agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from business lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.