Partnership Agreement in New York Legal Team Considerations
Partnership agreements are contractual documents designed to protect the interests of business partners and their investments3 min read
Partnership agreements are contractual documents designed to protect the interests of business partners and their investments. But in New York, understanding the unique complexities of the local legal landscape is key. This article offers key considerations for New York-based legal teams when drafting a partnership agreement template.
To pave the way for successful business partnerships, legal teams must generate a detailed, tailored agreement to govern the individual organization’s relationship. Such agreements often specify business activities, asset contributions, profit distribution, decision-making, and dispute resolution. As one of the 51 United States having its own set of governing laws, the local legal environment of New York demands special attention when drafting partnership agreements.
For counsel specifically located in the New York, the Department of State is the go-to source for state-specific laws applicable to the definition and operation of partnerships. It is important to be aware that these laws may be inconsistent with the Uniform Partnership Act, as New York has not implemented the UPA. These regulations are especially important to consider when forming and operating partnerships in the state of New York.
New York-specific details that must be addressed in partnership agreement template include the definition of a partnership which is unique to the state; the definition of partnership assets and liabilities, which could differ from accounting standards; protection of confidential information, including customer or client contacts; and the means of distributing profits between partners. As different regions have different expectations when it comes to many of these elements, working with an experienced legal counsel who understands the nuances of local law is essential.
Knowing which applicable laws apply is key to an accurate partnership agreement that fairly represents the rights and protections of all involved parties. Local counsel can review business goals and recommend solutions with the insight and expertise needed to accurately craft documents based on the partnership’s specific needs. While many organizations may seek to represent themselves in a partnership agreement negotiation, they should be aware that without the right guidance, misinterpretation of a law or a lack of basic understanding of legal concepts can lead to difficulty in the future.
Additionally, it is valuable to consider contract assurance models. Elements such as “fiduciary” responsibilities, for example, may not be adequately addressed without further understanding of how the local legal landscape will apply. Finding a lawyer who can add value to a partnership negotiation can make all the difference in the success of an agreement.
When looking for a lawyer who is experienced in New York business partnership agreements, it is important to select a counsel who is familiar with the latest court rulings while also understanding future trends. This will ensure the lawyer is best-positioned to advise on potential points of consideration that will avoid cases where an ascertainable economic injury results in a partnership dispute that falls to litigation.
Furthermore, legal counsel should be used when looking to exit the partnership, and the dispute resolution protocol should be thoroughly discussed while setting up the initial partnership agreement. In New York, a partner may unilaterally file for dissolution of a partnership, with thirty days written notice. A partner may also file an action against the other for dissolution if the partnership agreement does not provide another procedure. In these cases, however, it is essential to look into partnership-specific forfeiture provisions to evaluate the matter of liability.
In order to have a legally compliant and fair partnership agreement, a thorough, tailored understanding of local laws is imperative. A successful partnership agreement template is one that is crafted with an intimate knowledge of local laws and regulations, as well as with a commitment to the future success of the partnership. By engaging the help of counsel with expertise in local law, business partners will arrive at an agreement that successfully protects the interests of everyone involved.