Here is a list of the main areas covered by most partnership agreements. You and your partners should consider these issues before defining the conditions in writing: Partnership agreements should address certain tax choices and choose a partner for the role of the partnership representative. The partnership agent is the figurehead of the partnership under the new tax rules. Business owners enter the business with optimism and good intentions. However, disputes between trading partners are all too common and risk destroying the entire enterprise. A well-developed partnership agreement can protect homeowners` investments, significantly reduce business disruptions, and effectively resolve disputes when they arise, and later save owners tens of thousands of dollars in legal fees. Before you go into business with a partner, you must write a written agreement. Some of the most important practical reasons why a partnership contract should be written are: Key Takeaway: Partnership agreements can help resolve disputes and clearly define internal processes in different circumstances. Partnership agreements should also include provisions for the protection of majority owners. A drag along clause requires minority partners to sell their shares in the event of a third-party purchase. When a majority shareholder sells its shares to a third party, the minority shareholder must either (a) be part of the transaction and sell its shares to a third party buyer on similar terms, or b) acquire the majority partner`s shares on similar terms. The advantage for the majority owner is that he cannot be forced to remain in business simply because a minority owner does not want to sell. If a fair offer is made for the purchase of the business, the majority owner can benefit from this offer, even if it goes against the wishes of a minority partner.