Partnership agreement

PARTNERSHIP AGREEMENT

This partnership agreement (hereinafter the "Agreement") has been entered into in [City where the contract is signed] on [Contract date] between the following partners:

1. PARTIES

1.1 The parties to this Agreement (hereinafter the "Partners") are:

- [Partner 1 name]
Registry code / personal identification code: [Partner 1 registry code / personal identification code]
Address: [Partner 1 address]
Contact: [Partner 1 contact]

- [Partner 2 name]
Registry code / personal identification code: [Partner 2 registry code / personal identification code]
Address: [Partner 2 address]
Contact: [Partner 2 contact]

- [Partner 3 name]
Registry code / personal identification code: [Partner 3 registry code / personal identification code]
Address: [Partner 3 address]
Contact: [Partner 3 contact]

1.2 The partnership formed by the Agreement is not a legal person and is not subject to registration in the commercial register.

2. COMMON PURPOSE

2.1 The Partners enter into this Agreement to achieve the following common purpose: [Common purpose].

2.2 The Partners contribute to the achievement of the common purpose in the manner specified in the Agreement, protect the partnership against damage and take into account the interests of the other Partners (Law of Obligations Act (VÕS) § 580).

2.3 An immovable acquired in the course of the activities of the partnership becomes the joint ownership of the Partners in accordance with clause 9.1 of this Agreement.

3. CONTRIBUTIONS

3.1 The contribution of each Partner to the common purpose is:

- [Partner 1 name]: [Partner 1 type of contribution], with a value of [Partner 1 value of contribution (€)] euros (description: [Partner 1 description of contribution]);
- [Partner 2 name]: [Partner 2 type of contribution], with a value of [Partner 2 value of contribution (€)] euros (description: [Partner 2 description of contribution]);

- [Partner 3 name]: [Partner 3 type of contribution], with a value of [Partner 3 value of contribution (€)] euros (description: [Partner 3 description of contribution]).

3.2 Property and rights acquired with contributions become the joint ownership of the Partners in accordance with clause 9.1 of this Agreement.

3.3 Contributions are made without delay after the entry into force of the Agreement, unless otherwise arising from the nature of the contribution or unless the Partners have agreed otherwise in writing. A Partner is not obliged to increase the agreed contribution or to make additional contributions (VÕS § 581 (4)).

3.4 If the contribution consists in granting the use of property (including the use of premises), ownership of the property remains with the Partner who made the contribution. With regard to risk and liability for defects, the provisions on lease contracts apply where a thing is granted for use, and the provisions on contracts of sale apply where a thing is transferred (VÕS § 581 (3)).

4. MANAGEMENT AND DECISION-MAKING

4.1 The everyday activities of the partnership are managed as follows: [Everyday management].

4.2 Expenses exceeding [Spending limit without everyone's consent (€)] euros require the prior consent of all Partners.

4.3 Transactions beyond the scope of the everyday activities of the partnership require a resolution of the Partners, which is adopted with the consent of all Partners unless otherwise provided in the Agreement (VÕS § 587). Resolutions are formalised in writing or in a form reproducible in writing.

4.4 A Partner entitled to manage represents the other Partners before third parties (VÕS § 593) and does not delegate management duties to another person (VÕS § 585); where there are several managers, an act to which another manager objects is not performed (VÕS § 584).

4.5 For a good reason, in particular in the case of a material breach of obligations or inability to manage, the right of management and representation may be withdrawn from a Partner by a unanimous resolution of the other Partners (VÕS § 583 (2) and § 594).

5. DISTRIBUTION OF PROFIT AND LOSS

5.1 Profit is distributed among the Partners on the basis of the following principle: [Distribution of profit]. The shares of profit are: [Partner 1 name] — [Partner 1 share of profit (%)]%; [Partner 2 name] — [Partner 2 share of profit (%)]%; [Partner 3 name] — [Partner 3 share of profit (%)]%.

5.2 Loss is distributed among the Partners on the basis of the following principle: [Distribution of loss].

5.3 Profit is calculated and distributed with the following frequency: [Frequency of profit calculation].

6. ACCOUNTING AND REPORTING

6.1 All Partners are entitled at any time to examine the financial data and accounting documents of the partnership.

6.2 A Partner entitled to manage the partnership informs the other Partners of material circumstances concerning the partnership and, at their request, provides information on the transactions of the partnership; each Partner is entitled to examine all documents concerning the partnership. An agreement derogating from these rights is void (VÕS § 586).

6.3 After the end of each financial year and upon the termination of the partnership, a Partner entitled to manage submits a report on the activities and a proposal for the distribution of profit or the covering of loss (VÕS § 591).

6.4 Each Partner is itself responsible for the performance of its tax obligations arising from law.

7. OBLIGATIONS OF THE PARTNERS

7.1 Each Partner undertakes to act in good faith and may not harm the interests of the partnership or the other Partners.

7.2 The Partners may not assign claims against each other arising from the Agreement, except for a claim for compensation of management expenses and a claim for profit or for property to be received upon liquidation (VÕS § 588).

7.3 The financial data, business strategy and customer information of the partnership are confidential and may not be disclosed to third parties without the consent of the other Partners. The obligation also remains in force after the termination of the Agreement.

8. ADMISSION AND EXIT OF PARTNERS

8.1 A new partner is admitted to the partnership as follows: [Admission of a new partner]. The new Partner accedes to the Agreement by a written agreement.

8.2 If a Partner cancels the Agreement, dies or is declared bankrupt, the remaining Partners continue the partnership among themselves if at least two of them remain, and that Partner is deemed to have left the partnership (VÕS § 605). If only one Partner would remain in the partnership, the partnership terminates and is liquidated in accordance with the procedure set out in clause 12.

8.3 The share of a Partner who has left or been expelled from the partnership is bought out within [Buyout deadline (days)] days after leaving or expulsion.

8.4 The other Partners compensate the Partner who has left or been expelled (in the event of death, the heirs) for the share that the Partner would have received upon the liquidation of the partnership at the time of leaving (VÕS § 607). For obligations that arose before leaving and become collectible within five years, the Partner is jointly and severally liable to the creditors together with the other Partners, but the other Partners must perform them in relation to that Partner (VÕS § 608).

8.5 The other Partners may, by a joint resolution, expel from the partnership a Partner who has materially breached their obligations (VÕS § 606).

9. PROHIBITION ON COMPETITION AND PARTNERSHIP PROPERTY

9.1 Property and rights acquired in the course of the activities of the partnership belong to all Partners jointly (in joint ownership), not to any Partner separately.

9.2 Partnership property also includes the contributions. A Partner may not dispose of objects of the partnership property or demand the division of the partnership property (VÕS §§ 589–590).

9.3 During the partnership, no Partner may engage in activities directly competing with the area of activity of the partnership.

10. LIABILITY

10.1 When acting jointly, the Partners are jointly and severally liable to third parties: each Partner is liable for the full extent of the obligation (VÕS § 595). The termination of the partnership does not terminate or change the obligations of the Partners towards third parties.

10.2 In the relations between the Partners, liability is distributed in accordance with their shares in covering loss (clause 5.2).

10.3 A Partner compensates the other Partners for damage caused by a breach of obligation if the breach is not excusable.

11. TERM AND TERMINATION

11.1 This Agreement is valid: [Term].

11.2 Each Partner may cancel this Agreement at any time by giving advance notice of [Period of advance notice of cancellation], but not at a time when the termination of the partnership would be unreasonably harmful in view of the legitimate interests of the other Partners (VÕS § 597 (4)).

11.3 For a good reason, in particular in the case of a material breach of obligation by another Partner, a Partner may also cancel the Agreement without observing the period of advance notice. An agreement excluding or restricting this right is void (VÕS § 597 (5)).

11.4 The partnership also terminates by a joint resolution of the Partners and on the other grounds provided for in VÕS § 596. In the event of the cancellation, death or bankruptcy of a Partner, the partnership terminates only if fewer than two Partners remain (clause 8.2); the heirs or the trustee in bankruptcy give notice of the event without delay (VÕS § 598).

12. PROCEDURE FOR TERMINATION

12.1 Upon the termination of the partnership, the obligations of the partnership are performed first and the contributions of the Partners are then returned (VÕS §§ 602–603); the remaining property is distributed in accordance with the shares in the distribution of profit (clause 5.1, VÕS § 604). If the partnership property is insufficient for performing the common obligations, the Partners cover the deficit in accordance with their shares in covering loss (clause 5.2, VÕS § 602 (2)).

12.2 The liquidation operations are performed by the Partners jointly (VÕS § 601). If the return of a contribution is not possible, its value at the time it was made is compensated, except in the case of a contribution consisting in the provision of services or granting the use of a thing (VÕS § 603).

13. FORCE MAJEURE AND NOTICES

13.1 A Partner is not liable for a breach of obligation if the breach is excusable due to force majeure (VÕS § 103); the Partner notifies the other Partners thereof immediately.

13.2 Notices with legal consequences are given in writing or in a form reproducible in writing (including by e-mail) using the contact details set out in clause 1.1.

14. DISPUTE RESOLUTION

14.1 Disputes between the Partners are resolved primarily through negotiations and, failing agreement, as follows: [Dispute resolution].

14.2 The Agreement is governed by the law of [Governing law].

15. FINAL PROVISIONS

15.1 Amendments and supplements to the Agreement are made in writing or in a form reproducible in writing and enter into force once all Partners have confirmed them.

15.2 A Partner may not transfer its holding in the partnership to a third party without the prior written consent of all other Partners. An invalid provision does not affect the validity of the remaining provisions.

15.3 The Agreement constitutes the entire agreement between the Partners and supersedes prior agreements relating to the subject matter of the Agreement. The Agreement enters into force once all Partners have signed it.

16. LEGAL BASIS

16.1 This partnership agreement is governed by §§ 580–609 of the Law of Obligations Act.