A simple partnership agreement is a document that allows for more efficient business activities. A simple partnership, or consortium, is a temporary association created to conduct business. This structure is distinguished by mobility and low cost. This form of organization provides an opportunity in a short time to create the basis for long-term cooperation and allows more efficient use of shared knowledge and resources.
It is worth saying that the simple partnership agreement was used back in ancient Rome. This form of agreement was distributed in pre-revolutionary Russia. It made it possible to combine property and capital belonging to various people for doing business. Moreover, under the terms of the contract, each participant in the agreement could achieve their goals: improving the quality of goods and competitiveness of products, increasing profits, etc. In the future, simple partnerships were also used in economic activities, only this form of organization was called joint activity.
Partnership agreement: model, rights and obligations
The main duty of the parties to the partnership agreement is to work together to achieve common goals and accomplish tasks, make an individual contribution to the common cause, maintain property in proper condition, and keep records of joint assets. The consortiums together bear losses and expenses incurred in the joint conduct of business in proportion to investments in a common business.
Participants of a consortium under a partnership agreement, in addition to obligations, have common rights. They can use common property, take part in common affairs, get access to all documentation related to the conduct of business. Also, partners may act on behalf of all participants in the conduct of a common business, in the case when the simple partnership agreement does not contain reservations that the conduct of business is carried out by individuals or all participants together.
Consortiums have the right to make transactions with a third party on behalf of all parties to the contract in the presence of a power of attorney issued by other partners. They also distribute the profit received as a result of joint business in proportion to the individual contribution of each person to the common cause.
A contribution is recognized as everything that a partner contributes to the common business, including property, cash, professional skills, abilities, knowledge, as well as business connections and reputation. Any deposits by mutual agreement of all partners are subject to monetary valuation and assume equal value, unless other conditions follow from actual circumstances.
Conducting a common business can be performed by each participant. The simple partnership agreement also provides that joint work may be assigned to individual members. In such a case, the authority to carry out activities is certified by an agreement or a special power of attorney signed by all participants in the partnership.
In relation to third parties, the consortium participants cannot refer to the limited rights of the person who made the transaction, if they cannot prove that the third party knew about the restrictions at the time of the transaction.
A partner who performed the transaction on behalf of the other participants, without having the right to do so, may demand full reimbursement of all expenses and losses incurred if it is proved that this work was necessary and represented the interests of all consortiums.
A simple partnership agreement defines the liability of all parties.
Each of the participants is liable for common obligations with its property in proportion to the contribution made, if entrepreneurial activity is not carried out .
When conducting business, all comrades are jointly and severally liable for all obligations, regardless of what served as the basis for their occurrence.