Partnership Agreement in Nigeria Sample: What You Need to Know

Entering into a partnership agreement in Nigeria is a critical step towards starting a successful business venture. A partnership agreement outlines the terms and conditions governing the relationship between partners and the business. The agreement should be comprehensive, clear, and legally binding on both parties.

If you’re considering starting a partnership in Nigeria, it’s essential to have an agreement in place that outlines the scope of the partnership, the roles and responsibilities of each partner, and their share of profits and losses. Here’s what you need to know about a partnership agreement in Nigeria, including a sample agreement.

What is a Partnership Agreement?

A partnership agreement is a legal document that outlines the terms and conditions of a partnership. It ensures that partners are in agreement about the roles and responsibilities of each party, how the partnership will be managed, and the distribution of profits and losses.

A partnership agreement is essential because it helps to reduce the risk of disputes arising between partners. It also ensures that the partnership is conducted in line with the Nigerian Companies and Allied Matters Act (CAMA).

What to Include in a Partnership Agreement in Nigeria

The following are critical components of a partnership agreement in Nigeria:

1. Partnership Details

The agreement should identify the name of the partnership and the business it intends to undertake. It should also outline the nature of the partnership whether limited or unlimited partnership.

2. Partner Details

The agreement should contain the names, addresses, and contact information of all the partners who have signed the agreement.

3. Capital Contribution

The agreement should define the contributions of each partner, whether in cash, assets, or time. The agreement should also outline how the capital will be used to run the business.

4. Profit and Loss Sharing

The agreement should set out the share of profits and losses of each partner. This includes how profits will be allocated, how losses will be shared, and how partners can withdraw their share of profits.

5. Decision Making

The agreement should outline the decision-making structure of the partnership. The agreement should specify how decisions will be made, what decisions require consensus, and what kinds of decisions can be made by individual partners.

6. Management and Operational Structure

The partnership agreement should outline the management and operational structure of the partnership. This includes the roles and responsibilities of each partner and the distribution of authority and responsibilities.

7. Dispute Resolution

The agreement should outline how any disputes between partners will be resolved, including whether arbitration or litigation is the preferred method.

Sample Partnership Agreement in Nigeria

Here is a sample partnership agreement in Nigeria:

[Insert the name of the Partnership]

PARTNERSHIP AGREEMENT

This Partnership Agreement (the “Agreement”) is made and entered into as of the [insert date], by the partners listed below:

[Insert the names and addresses of the partners, and their percentage ownership in the partnership]

Article 1: Partnership Details

The name of the partnership is [insert the name of the partnership] and it is organized under the Companies and Allied Matters Act (CAMA).

Article 2: Purpose

The purpose of the partnership is to conduct the business of [insert the nature of the business].

Article 3: Capital Contribution

The partners agree to contribute the following capital to the partnership:

[Insert the capital contribution of each partner, including cash, assets, and time]

Article 4: Profit and Loss Sharing

The profits and losses of the partnership will be shared among the partners as follows:

[Insert the percentage of profits and losses allocated to each partner]

Article 5: Decision Making

All decisions concerning the partnership shall be made as follows:

[Insert the decision-making structure, including who has the authority to make decisions, when consensus is required, and what kinds of decisions can be made by individual partners]

Article 6: Management and Operational Structure

The partnership shall be managed and operated as follows:

[Insert the roles and responsibilities of each partner, the distribution of authority and responsibilities, and the management structure of the partnership]

Article 7: Dispute Resolution

All disputes arising under this Agreement shall be resolved as follows:

[Insert the dispute resolution mechanism, including whether arbitration or litigation is the preferred method]

Article 8: Term and Termination

This partnership shall commence on the date first written above and shall continue until [insert the termination date or how the partnership can be terminated].

Conclusion

A partnership agreement is a crucial document that spells out the various expectations, obligations, and benefits of a partnership. It is important to ensure that the agreement covers all the necessary components discussed in this article. A well-drafted partnership agreement in Nigeria can help to prevent disputes, reduce risks, and ensure a successful partnership.