Do partners need a written agreement?
It is not a legal requirement, but without one the Partnership Act 1890 defaults apply, including equal profit shares and dissolution in some situations when a partner leaves.
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Partnership or LLP members' agreement (England and Wales)
A partnership agreement, or LLP members' agreement, sets out how a business owned by partners or members runs: capital, profit shares, decision-making, time commitment, admitting new partners and what happens when someone leaves. Without one, default rules apply — for partnerships, the Partnership Act 1890.
When you need one
Use one from the start of any partnership or LLP. The statutory defaults — such as equal profit shares and, for a general partnership, dissolution when a partner leaves or dies — rarely suit a real business.
What it should contain
Capital
What each partner contributes, and whether interest is paid on it.
Profits and drawings
How profits and losses are shared and paid out.
Decisions
What needs a majority and what needs everyone.
Duties
Time commitment, good faith and no competing business.
Leaving
Notice, valuation and payout of an outgoing partner's share.
Expulsion and dissolution
When a partner can be removed, and how the business ends.
Points specific to England and Wales
- Under the Partnership Act 1890, partners share profits equally unless they agree otherwise, and a general partnership in England and Wales has no separate legal personality: each partner is liable for the firm's debts. An LLP under the Limited Liability Partnerships Act 2000 is a separate legal person with limited liability for its members.
Different rules can apply elsewhere in the UK: see the Scotland version of this guide.
Common mistakes
- No agreement, so a general partnership dissolves when a partner leaves or dies.
- Unclear valuation of a leaving partner's share.
- Assuming partners' liability is limited in a general partnership.
See a specimen partnership or llp members' agreement — a short illustration of the structure and key clauses, laid out as the app produces them.
Quick answers
What is the difference between a partnership and an LLP?
An LLP is registered at Companies House and is a separate legal person whose members' liability is limited. In a general partnership, partners are personally liable for the firm's debts.
Draft your partnership or llp members' agreement now
Be Contract Wise's powerful, carefully prepared drafting tools turn a short set of plain-English questions into a partnership or llp members' agreement under the law of England and Wales, laid out to a professional standard, with an explanation of every clause. Simple or complex, export to Word or PDF.
Start drafting — freeBrowse all guidesReviewed 2026-09-24. General legal information about the law of England and Wales, not legal advice.