Partnership Agreement - General (Kansas)

GENERAL PARTNERSHIP AGREEMENT

(Kansas Law)

TABLE OF CONTENTS

1. Formation and Purpose
2. Definitions
3. Partners and Capital Contributions
4. Profit and Loss Allocation
5. Distributions
6. Management and Voting
7. Partners' Duties and Restrictions
8. Meetings and Records
9. Banking and Financial Matters
10. Admission of New Partners
11. Withdrawal and Dissociation
12. Dissolution and Winding Up
13. Buyout Provisions
14. Non-Competition and Confidentiality
15. Indemnification
16. Dispute Resolution
17. General Provisions
18. Execution Block

1. FORMATION AND PURPOSE

1.1 Formation

This General Partnership Agreement (this "Agreement") is entered into as of [EFFECTIVE DATE] (the "Effective Date") by and among the undersigned Partners to form a general partnership (the "Partnership") pursuant to the Kansas Revised Uniform Partnership Act (K.S.A. § 56a-101 et seq.).

1.2 Partnership Name

The Partnership shall be conducted under the name: [PARTNERSHIP NAME]

The Partnership may conduct business under such other names as the Partners may approve.

1.3 Principal Place of Business

The Partnership's principal place of business shall be:

[ADDRESS]
[CITY], Kansas [ZIP]

The Partners may change the principal place of business by unanimous consent.

1.4 Purpose

The Partnership is formed for the purpose of:

[DESCRIBE BUSINESS PURPOSE]

The Partnership may engage in any lawful business activity approved by the Partners.

1.5 Term

The Partnership shall commence on the Effective Date and shall continue until dissolved in accordance with Section 12.

☐ Perpetual: The Partnership shall continue indefinitely until dissolved.
☐ Fixed Term: The Partnership shall continue until [DATE], unless earlier dissolved.

1.6 Registered Agent

The Partnership's registered agent in Kansas shall be:

Name: [REGISTERED AGENT NAME]
Address: [REGISTERED AGENT ADDRESS]

2. DEFINITIONS

"Act" – The Kansas Revised Uniform Partnership Act (K.S.A. § 56a-101 et seq.), as amended.

"Affiliate" – Any entity controlling, controlled by, or under common control with a Partner.

"Capital Account" – The account maintained for each Partner reflecting Capital Contributions, allocations of Profits and Losses, and distributions.

"Capital Contribution" – The total amount of cash and fair market value of property contributed by a Partner.

"Dissociation" – An event that terminates a Partner's status as a Partner, as described in Section 11.

"Distributions" – Payments of cash or property by the Partnership to Partners.

"Fiscal Year" – The Partnership's accounting year, which shall be the calendar year.

"Losses" – The Partnership's net losses as determined for federal income tax purposes.

"Majority Vote" – Approval by Partners holding more than 50% of the Percentage Interests.

"Managing Partner" – The Partner(s) designated to manage day-to-day operations, as specified in Section 6.

"Partner" – Each person who is a signatory to this Agreement or who is later admitted as a Partner.

"Partnership Interest" – A Partner's entire interest in the Partnership, including economic and governance rights.

"Percentage Interest" – A Partner's share of the Partnership as set forth in Section 3.

"Profits" – The Partnership's net profits as determined for federal income tax purposes.

"Supermajority Vote" – Approval by Partners holding at least [67/75]% of the Percentage Interests.

"Transfer" – Any sale, assignment, pledge, gift, or other disposition of a Partnership Interest.

"Unanimous Consent" – Approval by all Partners.

3. PARTNERS AND CAPITAL CONTRIBUTIONS

3.1 Initial Partners and Contributions

The initial Partners and their Capital Contributions and Percentage Interests are:

3.2 Capital Accounts

A separate Capital Account shall be maintained for each Partner. Each Partner's Capital Account shall be:

• Credited with Capital Contributions and allocated Profits
• Debited with distributions and allocated Losses
• Adjusted as required by Treasury Regulations under IRC Section 704(b)

3.3 Additional Capital Contributions

(a) Mandatory Contributions: If the Partnership requires additional capital, the Managing Partner may issue a capital call. Each Partner shall contribute their Percentage Interest share within [30] days of written notice.

(b) Failure to Contribute: A Partner who fails to make a required contribution shall:
☐ Have their Percentage Interest diluted proportionally
☐ Pay interest at [X]% per annum on the shortfall
☐ Be subject to buyout by the other Partners at [X]% of fair market value

(c) Voluntary Contributions: Partners may make additional voluntary contributions only with Majority Vote approval.

3.4 No Interest on Capital

No Partner shall receive interest on their Capital Contributions or Capital Account balance.

3.5 Return of Capital

No Partner has the right to demand return of their Capital Contribution except upon dissolution or as otherwise provided herein.

4. PROFIT AND LOSS ALLOCATION

4.1 Allocation of Profits and Losses

Except as otherwise provided, Profits and Losses shall be allocated among the Partners in proportion to their Percentage Interests.

4.2 Special Allocations

(a) Regulatory Allocations: The Partnership shall make any special allocations required to comply with Treasury Regulations under IRC Section 704(b), including qualified income offset, minimum gain chargeback, and partner nonrecourse debt minimum gain chargeback provisions.

(b) Curative Allocations: The Partners intend for allocations to have substantial economic effect under the Treasury Regulations. If any allocation lacks substantial economic effect, Profits and Losses shall be reallocated to achieve the intended economic result.

4.3 Tax Allocations

(a) Tax items shall generally be allocated consistent with book allocations.

(b) For contributed property with a difference between tax basis and fair market value, items shall be allocated under IRC Section 704(c) using the [traditional method / traditional method with curative allocations / remedial method].

4.4 Varying Interests

If a Partner's Percentage Interest changes during a Fiscal Year, Profits and Losses shall be allocated using:
☐ The interim closing of the books method
☐ The proration method based on days

5. DISTRIBUTIONS

5.1 Timing of Distributions

Distributions shall be made at such times and in such amounts as determined by Majority Vote, subject to:

• Maintaining adequate reserves for operations and obligations
• Compliance with the Act's restrictions on distributions

5.2 Order of Distributions

Distributions shall be made in the following order:

1. Tax Distributions: Sufficient to cover estimated tax liabilities (see Section 5.3)
2. Operating Distributions: Remaining amounts as determined by the Partners

5.3 Tax Distributions

The Partnership shall distribute to each Partner, at least quarterly, an amount equal to [X]% (the estimated combined federal and state tax rate) multiplied by the Partner's allocated taxable income, to enable Partners to pay taxes on Partnership income.

5.4 Distributions in Kind

Distributions of property other than cash require Unanimous Consent. Property distributions shall be valued at fair market value, and gain or loss shall be allocated as if the property were sold.

5.5 Limitations on Distributions

No distribution shall be made if, after giving effect to the distribution:

• The Partnership would be unable to pay its debts as they become due; or
• The Partnership's total assets would be less than its total liabilities (K.S.A. § 56a-406)

6. MANAGEMENT AND VOTING

6.1 Management Structure

☐ Partner-Managed: All Partners shall participate in management. Ordinary business decisions require Majority Vote.

☐ Managing Partner(s): The following Partner(s) shall serve as Managing Partner(s) with authority over day-to-day operations: [NAME(S)]

6.2 Managing Partner Authority

The Managing Partner shall have authority to:

• Conduct day-to-day business operations
• Hire and supervise employees
• Enter into contracts in the ordinary course of business up to $[AMOUNT]
• Maintain bank accounts and make routine payments
• Represent the Partnership in routine matters

6.3 Matters Requiring Majority Vote

The following matters require Majority Vote:

• Annual budgets and business plans
• Contracts exceeding $[AMOUNT]
• Employment of key personnel
• Distributions to Partners
• Amendments to this Agreement (unless requiring higher approval)

6.4 Matters Requiring Supermajority Vote

The following matters require Supermajority Vote ([67/75]%):

• Admission of new Partners
• Removal of a Managing Partner
• Sale of substantially all assets
• Merger or consolidation
• Incurrence of debt exceeding $[AMOUNT]
• Any transaction with an Affiliate of a Partner

6.5 Matters Requiring Unanimous Consent

The following matters require Unanimous Consent:

• Amendment of Percentage Interests
• Dissolution of the Partnership
• Any action that would cause personal liability to a non-consenting Partner
• Change in the Partnership's purpose

6.6 Compensation of Managing Partner

The Managing Partner shall receive:
☐ No additional compensation beyond their share of Profits
☐ A management fee of $[AMOUNT] per [month/year]
☐ A management fee equal to [X]% of gross revenues

6.7 Deadlock Resolution

If the Partners are unable to reach agreement on a matter requiring approval, the dispute shall be resolved pursuant to Section 16.

7. PARTNERS' DUTIES AND RESTRICTIONS

7.1 Fiduciary Duties

Each Partner owes fiduciary duties to the Partnership and other Partners, including:

(a) Duty of Loyalty: To account for Partnership property; not to deal with the Partnership as an adverse party; not to compete with the Partnership (K.S.A. § 56a-404(b))

(b) Duty of Care: To refrain from grossly negligent or reckless conduct, intentional misconduct, or knowing violation of law (K.S.A. § 56a-404(c))

(c) Duty of Good Faith: To discharge duties consistently with the contractual obligation of good faith and fair dealing (K.S.A. § 56a-404(d))

7.2 Devotion of Time

☐ Full-Time: Each Partner shall devote their full business time and attention to Partnership affairs.

☐ Part-Time: Partners may engage in other business activities, subject to Section 7.3.

☐ As Needed: Partners shall devote such time as reasonably necessary.

7.3 Outside Activities and Non-Competition

(a) During Partnership: Without Majority Vote approval, no Partner shall:

• Engage in any business that competes with the Partnership
• Divert Partnership opportunities to themselves or others
• Use Partnership resources for personal benefit

(b) Exceptions: The following activities are permitted:

• Passive investments that do not compete
• Activities disclosed and approved at the time of this Agreement
• [SPECIFIC PERMITTED ACTIVITIES]

7.4 Transactions with Partners

Any transaction between the Partnership and a Partner or Partner's Affiliate requires prior disclosure and Supermajority Vote approval (excluding the interested Partner).

7.5 Partnership Opportunities

Any business opportunity within the Partnership's scope of business shall be offered first to the Partnership. A Partner may pursue such opportunity personally only if the Partnership declines.

8. MEETINGS AND RECORDS

8.1 Partner Meetings

(a) Annual Meeting: An annual meeting shall be held within [90] days after the end of each Fiscal Year.

(b) Special Meetings: Special meetings may be called by the Managing Partner or by Partners holding at least [25]% of the Percentage Interests.

(c) Notice: Written notice of meetings shall be given at least [10] Business Days in advance, specifying the matters to be addressed.

(d) Quorum: A quorum requires the presence (in person, by proxy, or electronically) of Partners holding at least [50/67]% of Percentage Interests.

(e) Action Without Meeting: Partners may take action without a meeting by written consent signed by Partners holding the required approval percentage.

8.2 Books and Records

The Partnership shall maintain at its principal place of business:

• A current list of Partners with contact information and Percentage Interests
• Copies of federal, state, and local tax returns for the past [3] years
• Copies of this Agreement and all amendments
• Financial statements for the past [3] years
• Minutes of Partner meetings
• Records of Capital Contributions and distributions

8.3 Access to Records

Each Partner has the right to inspect and copy Partnership records during ordinary business hours upon reasonable notice (K.S.A. § 56a-403).

8.4 Financial Statements and Tax Returns

(a) Quarterly Reports: The Partnership shall provide unaudited financial statements within [30] days after each quarter-end.

(b) Annual Reports: The Partnership shall provide annual financial statements (audited / reviewed / compiled) within [90] days after year-end.

(c) Tax Information: The Partnership shall provide Schedule K-1s to Partners by [March 15] of each year.

8.5 Tax Matters Partner

[PARTNER NAME] shall serve as the "Partnership Representative" under IRC Section 6223 and shall have authority to act on the Partnership's behalf in tax proceedings.

9. BANKING AND FINANCIAL MATTERS

9.1 Bank Accounts

The Partnership shall maintain bank accounts at [BANK NAME] or other institutions approved by Majority Vote.

9.2 Authorized Signatories

Checks and withdrawals:

• Up to $[AMOUNT]: Signature of Managing Partner
• Over $[AMOUNT]: Signatures of [two Partners / Managing Partner and one other Partner]

9.3 Accounting Method

The Partnership shall use the [cash / accrual] method of accounting.

9.4 Fiscal Year

The Partnership's Fiscal Year shall be the calendar year ending December 31.

10. ADMISSION OF NEW PARTNERS

10.1 Admission Requirements

New Partners may be admitted only with Supermajority Vote approval and upon:

• Execution of this Agreement or a joinder agreement
• Payment of required Capital Contribution
• Compliance with any other conditions imposed by the Partners

10.2 Effect of Admission

Upon admission, a new Partner shall have all rights and obligations of a Partner hereunder.

10.3 Adjustment of Percentage Interests

Upon admission of a new Partner, existing Partners' Percentage Interests shall be adjusted proportionally unless otherwise agreed in writing.

11. WITHDRAWAL AND DISSOCIATION

11.1 Events of Dissociation

A Partner is dissociated from the Partnership upon:
(a) Voluntary withdrawal pursuant to Section 11.2
(b) Death or incapacity
(c) Bankruptcy or insolvency
(d) Expulsion by Unanimous Consent of the other Partners
(e) Expulsion by judicial decree (K.S.A. § 56a-601)
(f) Other events specified in the Act

11.2 Voluntary Withdrawal

A Partner may withdraw upon [90/180] days' prior written notice to the other Partners.

☐ Withdrawal Permitted: A Partner may withdraw at any time.
☐ Withdrawal Restricted: A Partner may not withdraw before [DATE / X years from Effective Date] except with Unanimous Consent.

11.3 Effect of Dissociation

Upon dissociation:
(a) The dissociated Partner's right to participate in management terminates
(b) The dissociated Partner's fiduciary duties terminate (except for matters arising before dissociation)
(c) The Partnership shall purchase the dissociated Partner's interest per Section 13

11.4 Wrongful Dissociation

A dissociation is wrongful if it:

• Breaches this Agreement
• Occurs before the expiration of a fixed term
• Results from the Partner's expulsion for misconduct

A wrongfully dissociating Partner shall be liable to the Partnership for damages caused by the wrongful dissociation.

12. DISSOLUTION AND WINDING UP

12.1 Events Causing Dissolution

The Partnership shall dissolve upon:
(a) Unanimous Consent of all Partners
(b) Expiration of a fixed term (if applicable)
(c) An event making it unlawful to continue
(d) Judicial decree under K.S.A. § 56a-801
(e) Dissociation of a Partner, unless the remaining Partners vote to continue within [90] days

12.2 Continuation After Dissociation

Upon dissociation of a Partner, the remaining Partners may, by Majority Vote within [90] days, elect to continue the Partnership. The dissociated Partner's interest shall be purchased per Section 13.

12.3 Winding Up

Upon dissolution:
(a) The Partnership shall cease conducting business except as necessary for winding up
(b) The Managing Partner (or a liquidating Partner designated by Majority Vote) shall wind up affairs
(c) Partnership property shall be applied to discharge obligations and distribute remaining assets

12.4 Order of Distribution on Dissolution

Partnership assets shall be distributed in the following order:

1. Creditors, including Partners who are creditors (to the extent permitted by law)
2. Partners for unpaid distributions previously declared
3. Partners for return of Capital Contributions
4. Partners for positive Capital Account balances in proportion to those balances

12.5 Certificate of Dissolution

Upon completion of winding up, the Partnership shall file a statement of dissolution with the Kansas Secretary of State.

13. BUYOUT PROVISIONS

13.1 Buyout Upon Dissociation

Upon dissociation (other than dissolution), the Partnership shall purchase the dissociated Partner's interest.

13.2 Buyout Price

The buyout price shall be the fair market value of the dissociated Partner's Partnership Interest as of the date of dissociation, determined as follows:

☐ Appraisal: By a qualified appraiser mutually agreed upon, or if the parties cannot agree, each party shall select an appraiser and the two appraisers shall select a third, with the buyout price being the average of the three appraisals.

☐ Formula: [SPECIFY FORMULA, e.g., X times trailing 12-month net income, book value, etc.]

☐ Agreement: As agreed by the dissociating Partner and remaining Partners.

13.3 Adjustments to Buyout Price

(a) Wrongful Dissociation Discount: If dissociation is wrongful, the buyout price shall be reduced by:

• Damages caused by the wrongful dissociation
• A [X]% discount for wrongful departure

(b) Minority Discount: A minority discount [shall / shall not] apply.

(c) Marketability Discount: A marketability discount [shall / shall not] apply.

13.4 Payment Terms

The buyout price shall be paid:

☐ Lump Sum: Within [90] days of the valuation determination
☐ Installments: [X]% down payment within [90] days, balance in [X] equal [monthly/quarterly/annual] installments with interest at [X]% per annum
☐ Other: [SPECIFY]

13.5 Security for Deferred Payments

If payment is deferred, the Partnership shall provide the dissociated Partner with a promissory note secured by:
☐ Partnership assets
☐ Personal guarantees of remaining Partners
☐ No additional security

13.6 Release

Upon completion of the buyout, the dissociated Partner shall execute a general release of claims against the Partnership and remaining Partners (except for payment obligations).

14. NON-COMPETITION AND CONFIDENTIALITY

14.1 Non-Competition

Upon dissociation, each Partner agrees not to:

• Compete directly with the Partnership within [geographic area] for [X] years
• Solicit Partnership customers or employees for [X] years

14.2 Confidential Information

Each Partner shall keep confidential all non-public information of the Partnership, including:

• Customer lists and information
• Financial information
• Business strategies and plans
• Trade secrets (protected under K.S.A. § 60-3320 et seq.)

Confidentiality obligations survive termination of the Partnership and dissociation of a Partner.

14.3 Return of Materials

Upon dissociation, each Partner shall return all Partnership property, documents, and information.

14.4 Remedies

Breach of this Section 14 shall entitle the Partnership to injunctive relief without bond, in addition to damages.

15. INDEMNIFICATION

15.1 Indemnification by Partnership

The Partnership shall indemnify, defend, and hold harmless each Partner from claims, damages, and expenses arising from:

• Partnership business conducted in good faith
• Actions authorized by this Agreement
• Actions taken as Managing Partner within the scope of authority

15.2 Indemnification by Partners

Each Partner shall indemnify the Partnership and other Partners from claims arising from:

• The Partner's breach of this Agreement
• The Partner's gross negligence, willful misconduct, or fraud
• The Partner's unauthorized actions

15.3 Advancement of Expenses

The Partnership may advance expenses to a Partner entitled to indemnification, provided the Partner undertakes to repay if indemnification is ultimately denied.

15.4 Insurance

The Partnership may purchase liability insurance for Partners and the Partnership.

16. DISPUTE RESOLUTION

16.1 Negotiation

Partners shall first attempt to resolve disputes through good-faith negotiation for at least [30] days.

16.2 Mediation

If negotiation fails, disputes shall be submitted to non-binding mediation before a mediator agreed upon by the parties, or if they cannot agree, appointed by [JAMS / AAA].

16.3 Arbitration

If mediation fails, disputes shall be resolved by binding arbitration:

• Administered by: [JAMS / AAA]
• Rules: Commercial Arbitration Rules
• Location: [City], Kansas
• Arbitrator: Single arbitrator with business/legal expertise
• Judgment on the award may be entered in any court of competent jurisdiction

16.4 Governing Law

This Agreement shall be governed by the laws of the State of Kansas, including the Kansas Revised Uniform Partnership Act (K.S.A. § 56a-101 et seq.).

16.5 Venue

For matters not subject to arbitration, exclusive venue shall be the state or federal courts located in [Johnson County / Shawnee County], Kansas.

16.6 Jury Waiver

TO THE FULLEST EXTENT PERMITTED BY KANSAS LAW, EACH PARTNER WAIVES ANY RIGHT TO A JURY TRIAL IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

Partner Initials: _______ _______ _______

16.7 Attorneys' Fees

The prevailing party in any dispute shall be entitled to recover reasonable attorneys' fees and costs.

17. GENERAL PROVISIONS

17.1 Notices

All notices shall be in writing and delivered by personal delivery, overnight courier, certified mail, or email (with confirmation) to the addresses set forth in Section 3.1 or as updated by written notice.

17.2 Amendment

This Agreement may be amended only by written instrument signed by Partners holding at least [Majority / Supermajority / Unanimous] approval, except that amendments affecting a Partner's Percentage Interest or economic rights require that Partner's consent.

17.3 Waiver

No waiver is effective unless in writing. Failure to enforce any provision does not waive the right to enforce it later.

17.4 Severability

If any provision is held invalid, the remaining provisions remain in force, and the invalid provision shall be reformed to the minimum extent necessary.

17.5 Entire Agreement

This Agreement constitutes the entire agreement among the Partners regarding the Partnership and supersedes all prior negotiations and agreements.

17.6 Binding Effect

This Agreement binds and benefits the Partners and their heirs, successors, and permitted assigns.

17.7 No Third-Party Beneficiaries

This Agreement benefits only the Partners and the Partnership; no third party has any rights hereunder.

17.8 Counterparts

This Agreement may be executed in counterparts, each of which is an original.

17.9 Electronic Signatures

This Agreement may be executed electronically pursuant to the Kansas Uniform Electronic Transactions Act (K.S.A. § 16-1601 et seq.).

17.10 Construction

Headings are for convenience only. "Including" means "including without limitation." This Agreement shall not be construed against any drafter.

18. EXECUTION BLOCK

IN WITNESS WHEREOF, the undersigned Partners have executed this General Partnership Agreement as of the Effective Date.

PARTNERS:

JURY WAIVER ACKNOWLEDGMENT:

Each Partner acknowledges having read and understood the jury waiver in Section 16.6.

EXHIBIT A – ADDITIONAL PARTNER INFORMATION

EXHIBIT B – INITIAL CAPITAL CONTRIBUTIONS

EXHIBIT C – PERMITTED OUTSIDE ACTIVITIES

The following outside activities are permitted notwithstanding Section 7.3:

END OF AGREEMENT