When starting a business in Chicago, Illinois, you will most likely need a partnership agreement. A partnership agreement is a legally binding document between the partners of a business. It outlines the roles, responsibilities, and rights of each partner. Furthermore, it can provide liability protection, limit the partners’ liability, and define the partner’s duties.

Many entrepreneurs in Chicago face a number of legal compliance issues when getting started with a business. Drafting a partnership agreement can help to avoid any misunderstandings or liabilities that the partners might incur. To better understand partnership agreements and to make the best decision for their business, entrepreneurs should consider the following frequently asked questions.

What Does a Partnership Agreement Do?

A partnership agreement serves to lay out the parameters of the relationship between business partners. The agreement should clearly outline the purpose of the business, the structure of the business, the roles of each partner, the business's finances, and the resolution process in the event of a dispute.

Furthermore, a partnership agreement can limit the liabilities of each partner by clarifying the specific duties and responsibilities of the partners within the business. It also outlines the consequences if either partner fails to fulfill their responsibilities.

What is Included in a Partnership Agreement?

A partnership agreement should include the terms and conditions of the business. It should outline how profits and losses will be shared, what roles each partner has, how decisions will be made, and any other relevant information.

In addition, the partnership agreement should include the process for admitting new partners, the process for dismissing a partner, and the process for resolving disputes and disagreements. It should also define the contributions required from each partner, such as capital and labor. Lastly, the partnership agreement should explain what will happen in the event of a partner’s death, disability, or bankruptcy.

When Should You Create a Partnership Agreement?

Ideally, a partnership agreement should be created before the business starts operating. Creating a partnership agreement before the business starts allows the partners to clarify their roles, responsibilities, and rights early on in the business’s lifecycle. This helps to avoid any confusion or misunderstandings between the partners and protects everyone involved in the business.

However, if you have already started your business without a partnership agreement, it is not too late to create one. Drafting a partnership agreement today can help to protect the interests of you and your business partners.

Who Should Write the Partnership Agreement?

The first step in creating a partnership agreement is to have a lawyer experienced in the particular state’s regulations review the agreement before signing it. Even if you and your partners create the agreement without the expertise of a lawyer, having a lawyer with an understanding of the applicable state laws review the document is a sensible decision. An experienced business lawyer can make sure that your agreement meets the specific state’s requirements and will identify any potential areas of risk.

Finding the right lawyer for this particular case in Chicago has become much simpler with the emergence of online legal help services, such as UpCounsel. With UpCounsel, you can select from a network of experienced lawyers. You can view the profiles of the online attorneys and read ratings and reviews of their previous work. Whether you need a one-time consultation or legal assistance and advice in other related fields, UpCounsel’s expansive network of experienced attorneys have you covered.


Creating a partnership agreement is essential for any business in the state of Illinois. A partnership agreement provides clarity and protection for all the parties involved and outlines the roles and responsibilities for each partner. It also limits the liabilities of the partners and establishes the process in the event of a dispute.

Drafting a partnership agreement is a complex process, and getting an experienced lawyer involved is highly recommended. With the emergence of online legal services, such as UpCounsel, you can access experienced attorneys on an as-needed basis, who have experience in local regulations.


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