60 40 Partnership Agreement for Canada

60 40 Partnership Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that establishes and regulates a partnership with a 60-40 ownership and profit-sharing structure. This document outlines the rights, responsibilities, and obligations of partners, including capital contributions, management rights, decision-making processes, and profit distribution mechanisms. It incorporates relevant provincial partnership laws and federal tax considerations, providing a framework for both operational management and dispute resolution. The agreement includes specific provisions for the uneven ownership split, ensuring clear guidelines for major business decisions and partner authority levels.

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What is a 60 40 Partnership Agreement?

The 60-40 Partnership Agreement is a crucial legal document used in Canadian business contexts where partners wish to establish an uneven ownership and profit-sharing arrangement. This specific split is common in situations where one partner contributes more capital, expertise, or resources to the business venture. The document is essential for businesses operating across various Canadian provinces, incorporating both federal and provincial legal requirements. It provides comprehensive coverage of partnership formation, management structure, capital contributions, profit distribution according to the 60-40 split, partner obligations, and dissolution procedures. This agreement type is particularly relevant for new business ventures, professional practices, and existing businesses transitioning to a partnership model, where clear delineation of uneven ownership rights and responsibilities is crucial for smooth operations.

What sections should be included in a 60 40 Partnership Agreement?

1. Parties: Identification and details of the partners entering into the 60-40 partnership

2. Background: Context of the partnership formation and brief description of the business purpose

3. Definitions: Definitions of key terms used throughout the agreement

4. Partnership Formation: Declaration of partnership formation, business name, and commencement date

5. Capital Contributions: Details of initial and ongoing capital contributions from each partner

6. Profit and Loss Sharing: Specification of the 60-40 split and mechanics of profit/loss distribution

7. Management and Control: Decision-making processes and management responsibilities

8. Partner Rights and Obligations: Detailed rights and duties of each partner

9. Banking and Financial Records: Financial management procedures and record-keeping requirements

10. Partner Meetings: Procedures for regular and special partner meetings

11. Transfer of Partnership Interest: Rules regarding transfer of partnership interests to third parties

12. Dissolution and Termination: Conditions and procedures for partnership dissolution

13. Governing Law: Specification of Canadian law as governing law and jurisdiction

What sections are optional to include in a 60 40 Partnership Agreement?

1. Non-Competition: Restrictions on partners engaging in competing businesses, include when partners have other business interests

2. Intellectual Property: IP ownership and usage rights, include when the partnership involves creation or use of IP

3. Insurance: Partnership insurance requirements, include for high-risk businesses

4. Dispute Resolution: Alternative dispute resolution procedures, include when partners prefer arbitration over litigation

5. Death or Incapacity: Procedures in case of partner death or incapacity, include for long-term partnerships

6. New Partner Admission: Process for admitting new partners, include if future expansion is contemplated

7. Partnership Representative: Designation of partnership representative for tax purposes, include for larger partnerships

8. Force Majeure: Provisions for unforeseen circumstances, include for businesses vulnerable to external factors

What schedules should be included in a 60 40 Partnership Agreement?

1. Schedule A - Initial Capital Contributions: Detailed breakdown of each partner's initial capital contributions

2. Schedule B - Business Plan: Initial business plan and strategic objectives

3. Schedule C - Partner Contact Information: Complete contact details and addresses of all partners

4. Schedule D - Asset Register: List of partnership assets and their agreed values

5. Schedule E - Division of Responsibilities: Detailed allocation of management and operational responsibilities

6. Appendix 1 - Banking Resolution: Banking arrangements and authorized signatories

7. Appendix 2 - Accounting Policies: Agreed accounting principles and procedures

8. Appendix 3 - Partnership Protocols: Day-to-day operational procedures and protocols

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Professional Services

Real Estate

Retail

Technology

Manufacturing

Construction

Healthcare

Consulting

Food and Beverage

Agriculture

Creative Industries

Transportation and Logistics

Financial Services

Educational Services

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Operations

Compliance

Tax

Business Development

Risk Management

Strategic Planning

Relevant Roles

Business Owner

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Business Development Manager

Corporate Lawyer

Accountant

Tax Advisor

Partnership Manager

Operations Director

Finance Manager

Compliance Officer

Business Consultant

Managing Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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