Partnership Agreement - General (Michigan)

GENERAL PARTNERSHIP AGREEMENT

STATE OF MICHIGAN

This General Partnership Agreement (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and among the undersigned Partners, each identified on Schedule A attached hereto.

The Partners hereby form a general partnership (the "Partnership") pursuant to and in accordance with the Michigan Uniform Partnership Act, MCL 449.1 et seq. (Act 72 of 1917), and the following terms and conditions.

RECITALS

A. The Partners desire to associate themselves as a general partnership under the laws of the State of Michigan for the purposes set forth herein;

B. Each Partner will make or has made the capital contributions described on Schedule A;

C. The Partners wish to set forth in writing their respective rights, obligations, and duties as partners; and

D. The Partners intend that this Agreement shall govern the internal affairs of the Partnership and, to the fullest extent permitted by applicable law, modify or supplement the default provisions of the governing Michigan partnership statute.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:

TABLE OF CONTENTS

1. Definitions
2. Formation; Name; Purpose; Term
3. Capital Contributions; Partnership Interests
4. Allocations; Distributions; Tax Matters
5. Management; Voting; Meetings
6. Representations and Warranties
7. Covenants and Restrictions
8. Books, Records, and Accounting
9. Insurance and Risk Management
10. Indemnification; Limitation of Liability
11. Transfer of Interests; Admission; Withdrawal
12. Dissociation; Dissolution; Winding Up
13. Default and Remedies
14. Risk Allocation
15. Dispute Resolution
16. General Provisions
17. Michigan-Specific Provisions
18. Execution

ARTICLE 1. DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below.

"AAA" means the American Arbitration Association.

"Act" means the Michigan Uniform Partnership Act (MCL 449.1 et seq., Act 72 of 1917), as amended from time to time.

"Adjusted Capital Account" has the meaning assigned in Section 4.1(c).

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

"Agreement" has the meaning set forth in the preamble.

"Assumed Name Certificate" means the Certificate of Assumed Name or Certificate of Persons Conducting Business Under Assumed Name filed with the applicable county clerk(s) and/or LARA, as required by MCL 445.1 et seq. and MCL 449.44.

"Capital Account" means, for each Partner, the account maintained in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), as adjusted pursuant to Section 4.1.

"Capital Contribution" means, for any Partner, the total amount of cash and the agreed fair market value of property (net of liabilities assumed or taken subject to) contributed to the Partnership by such Partner, as initially set forth on Schedule A.

"Certificate of Copartnership" means the certificate filed with the county clerk pursuant to MCL 449.44.

"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute.

"Defaulting Partner" has the meaning set forth in Section 13.1.

"Effective Date" has the meaning set forth in the preamble.

"Fiscal Year" has the meaning set forth in Section 8.1.

"Force Majeure Event" has the meaning set forth in Section 14.2.

"LARA" means the Michigan Department of Licensing and Regulatory Affairs.

"Losses" has the meaning set forth in Section 10.1.

"Majority Interest" means Partners holding more than fifty percent (50%) of the aggregate Percentage Interests.

"MCL" means the Michigan Compiled Laws, as amended from time to time.

"Net Profits" and "Net Losses" mean, for each Fiscal Year (or other relevant period), the Partnership's taxable income or loss as determined for federal income tax purposes, with the adjustments required by Treasury Regulation Section 1.704-1(b)(2)(iv).

"Non-Defaulting Partner" has the meaning set forth in Section 13.2.

"Partner" means each Person identified as a partner on Schedule A and any Person subsequently admitted as a partner pursuant to this Agreement.

"Partnership" has the meaning set forth in the preamble.

"Partnership Interest" means the entire ownership interest of a Partner in the Partnership, including such Partner's economic interest, right to participate in management, and all other rights and obligations under this Agreement and the Act.

"Partnership Representative" has the meaning set forth in Section 4.5.

"Percentage Interest" means, for any Partner, the percentage set forth opposite such Partner's name on Schedule A, as amended from time to time.

"Person" means any individual, corporation, partnership, limited liability company, trust, estate, governmental authority, or other entity.

"Transfer" means any sale, assignment, pledge, hypothecation, encumbrance, gift, or other direct or indirect disposition or transfer, whether voluntary or involuntary, by operation of law or otherwise.

"Treasury Regulations" means the regulations promulgated under the Code by the United States Department of the Treasury.

ARTICLE 2. FORMATION; NAME; PURPOSE; TERM

2.1 Formation. The Partnership is hereby formed as a general partnership under the laws of the State of Michigan, pursuant to the Act, effective as of the Effective Date. The Partners shall execute and file any documents required by the Act or other applicable Michigan law, including but not limited to a Certificate of Copartnership with the county clerk of each county in which the Partnership conducts business (MCL 449.44) and, if applicable, a Certificate of Assumed Name (MCL 445.1 et seq.).

2.2 Name. The Partnership shall conduct its business under the name:

[________________________________]

or such other name as the Partners may unanimously approve. If the Partnership operates under a name other than the true names of all Partners, the Partnership shall file a Certificate of Persons Conducting Business Under Assumed Name with the county clerk of each county where business is conducted, pursuant to MCL 445.1 (Act 101 of 1907), and if applicable, a Certificate of Assumed Name with LARA.

2.3 Purpose. The purpose of the Partnership is to:

[________________________________]

and to engage in any and all lawful activities incidental or ancillary thereto as the Partners may from time to time agree.

2.4 Principal Office. The principal office of the Partnership shall be located at:

[________________________________]
[________________________________]
[________________________________]

or at such other place within the State of Michigan as the Partners may from time to time determine by Majority Interest vote.

2.5 Registered Agent. If required by applicable law, the Partnership's registered agent for service of process in the State of Michigan shall be:

Name: [________________________________]
Address: [________________________________]
[________________________________]

2.6 Term. The Partnership shall commence on the Effective Date and shall continue:

☐ At will, until dissolved in accordance with Article 12 of this Agreement or the Act.

☐ For a definite term of [____] years, ending on [__/__/____], unless sooner dissolved in accordance with Article 12 of this Agreement or the Act.

☐ Until the completion of the following particular undertaking: [________________________________], unless sooner dissolved in accordance with Article 12 of this Agreement or the Act.

2.7 Certificate of Copartnership (MCL 449.44). The Partners shall file a Certificate of Copartnership with the county clerk of each county where the Partnership conducts business. The Certificate shall include:

(a) The name of the Partnership;
(b) The names of all Partners;
(c) The principal place of business;
(d) The purpose of the Partnership; and
(e) The duration of the Partnership (if for a definite term).

The Certificate of Copartnership, when filed, authorizes the Partnership to conduct business as partners for a period of five (5) years. Within ninety (90) days before the expiration date, a renewal certificate may be filed with the county clerk upon payment of applicable fees.

ARTICLE 3. CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions. Each Partner shall make the initial Capital Contribution set forth opposite such Partner's name on Schedule A on or before the Effective Date (or such later date as specified on Schedule A). Contributions may be made in cash or in property valued at the agreed fair market value as set forth on Schedule A.

3.2 Additional Contributions.

(a) No Partner shall be required to make additional Capital Contributions without such Partner's prior written consent.

(b) If the Partners determine by unanimous vote that additional capital is necessary, the Partners shall have the right (but not the obligation) to make additional Capital Contributions pro rata in accordance with their Percentage Interests.

(c) A Partner who fails to make an additional Capital Contribution when due, after having agreed to do so, shall be subject to the remedies set forth in Section 13.1.

(d) Schedule A shall be amended to reflect any additional Capital Contributions.

3.3 Capital Accounts. A separate Capital Account shall be established and maintained for each Partner in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv). Each Partner's Capital Account shall be:

(a) Increased by (i) the amount of cash contributed, (ii) the agreed fair market value of property contributed (net of liabilities assumed), and (iii) allocations of Net Profits; and

(b) Decreased by (i) the amount of cash distributed, (ii) the agreed fair market value of property distributed (net of liabilities assumed), and (iii) allocations of Net Losses.

3.4 Interest on Capital. No Partner shall be entitled to interest on any Capital Contribution or Capital Account balance, consistent with MCL 449.18(d), which provides that a Partner who makes a payment or advance beyond the agreed capital contribution is entitled to interest thereon.

3.5 Withdrawal of Capital. Except as expressly provided in this Agreement, no Partner may withdraw any part of its Capital Contribution or Capital Account balance without the unanimous written consent of all Partners.

3.6 No Priority. Except as specifically provided in this Agreement, no Partner shall have priority over any other Partner with respect to the return of Capital Contributions or distributions.

ARTICLE 4. ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS

4.1 Allocation of Net Profits and Net Losses.

(a) Profits. Net Profits for each Fiscal Year shall be allocated to the Partners in proportion to their respective Percentage Interests.

(b) Losses. Net Losses for each Fiscal Year shall be allocated to the Partners in proportion to their respective Percentage Interests; provided, however, that Net Losses shall not be allocated to any Partner to the extent that such allocation would cause or increase a deficit balance in such Partner's Capital Account.

(c) Adjusted Capital Accounts. Capital Accounts shall be adjusted to reflect the allocations described herein and to comply with Treasury Regulation Section 1.704-1(b)(2)(iv) (the "Adjusted Capital Account").

(d) Regulatory Allocations. The following special allocations shall be made:

(i) Minimum Gain Chargeback. If there is a net decrease in Partnership minimum gain during any Fiscal Year, each Partner shall be specially allocated items of income and gain in accordance with Treasury Regulation Sections 1.704-2(f) and 1.704-2(i)(4).

(ii) Qualified Income Offset. If any Partner unexpectedly receives an adjustment, allocation, or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income and gain shall be specially allocated to such Partner to eliminate the deficit balance as quickly as possible.

4.2 Distributions.

(a) Cash available for distribution shall be distributed to the Partners at such times and in such amounts as determined by a Majority Interest vote, pro rata in accordance with their respective Percentage Interests.

(b) No distribution shall be made if, after giving effect thereto, the Partnership would be unable to pay its debts as they become due in the ordinary course of business.

(c) A Partner has no right to receive a distribution in any form other than cash, except as otherwise provided in Section 12.5 or with unanimous consent.

4.3 Tax Allocations. Items of Partnership income, gain, loss, deduction, and credit shall be allocated among the Partners for federal, state, and local income tax purposes in accordance with the allocations of Net Profits and Net Losses set forth in Section 4.1, except as otherwise required by Code Section 704(c) and the Treasury Regulations thereunder.

4.4 Withholding. The Partnership is authorized to withhold from distributions, or with respect to allocations, to a Partner and to pay over to any federal, state, or local government any amounts required to be withheld pursuant to the Code, Michigan law, or any other applicable provision of law. Any amounts so withheld shall be treated as distributions to the relevant Partner.

4.5 Partnership Representative. The following Partner is designated as the "Partnership Representative" within the meaning of Code Section 6223, as amended by the Bipartisan Budget Act of 2015:

Name: [________________________________]

(a) The Partnership Representative shall have the authority to act on behalf of the Partnership in all tax proceedings and audits before the Internal Revenue Service and the Michigan Department of Treasury.

(b) The Partnership Representative shall promptly notify all Partners of any administrative adjustment request or notice of any proceeding.

(c) If an election under Code Section 6226 (the "push-out" election) is available, the Partnership Representative shall make such election upon the written request of a Majority Interest of the Partners.

4.6 Tax Returns and Elections.

(a) The Partnership shall prepare and timely file all required federal, state, and local tax returns, including any city income tax returns required by the Michigan City Income Tax Act (MCL 141.501 et seq.) for cities where the Partnership conducts business.

(b) All elections required or permitted to be made by the Partnership under the Code or Michigan law shall be made by the Partnership Representative with the consent of a Majority Interest.

(c) The Partnership shall furnish to each Partner a Schedule K-1 (or equivalent) and any applicable Michigan and city tax information within seventy-five (75) days after the end of each Fiscal Year.

ARTICLE 5. MANAGEMENT; VOTING; MEETINGS

5.1 Management Rights. The Partnership shall be managed collectively by the Partners. Each Partner shall have equal rights in the management and conduct of the Partnership's business, pursuant to MCL 449.18(e). Unless otherwise specified in this Agreement, any decision or action relating to the ordinary course of business requires the affirmative vote or consent of Partners holding a Majority Interest.

5.2 Managing Partner. The Partners may designate one or more Partners as "Managing Partner(s)" to oversee day-to-day operations:

☐ Managing Partner designated: [________________________________]

☐ No Managing Partner designated; all Partners share management equally.

The Managing Partner shall have authority to:

(a) Execute contracts in the ordinary course of business not exceeding $[____] individually or $[____] in the aggregate per Fiscal Year;
(b) Hire and supervise employees and independent contractors;
(c) Maintain Partnership bank accounts and make ordinary disbursements;
(d) Manage the Partnership's compliance with applicable Michigan laws and filing requirements, including county filings and city income tax returns.

5.3 Major Decisions. The following actions require the unanimous written consent of all Partners:

(a) Amendment or modification of this Agreement;
(b) Admission of a new Partner;
(c) Sale, lease, exchange, or other disposition of all or substantially all of the Partnership's assets outside the ordinary course of business;
(d) Any act that would make it impossible to carry on the ordinary business of the Partnership (MCL 449.9(3)(c));
(e) Merger, conversion, or domestication of the Partnership;
(f) Voluntary dissolution of the Partnership;
(g) Incurring indebtedness in excess of $[____];
(h) Making any capital expenditure in excess of $[____];
(i) Entering into any agreement or transaction with an Affiliate of any Partner;
(j) Filing or settlement of any lawsuit or claim involving an amount in excess of $[____];
(k) Assignment of Partnership property for the benefit of creditors (MCL 449.9(3)(a));
(l) Confession of a judgment (MCL 449.9(3)(d));
(m) Submission of a Partnership claim or liability to arbitration or reference (MCL 449.9(3)(e)).

5.4 Meetings.

(a) Regular Meetings. The Partners shall hold regular meetings at least [quarterly/annually] at the principal office or such other place as the Partners may agree.

(b) Special Meetings. Any Partner may call a special meeting upon at least five (5) business days' prior written notice to all other Partners, specifying the date, time, place, and purpose of the meeting.

(c) Telephonic/Electronic Participation. Partners may participate in meetings by telephone, video conference, or other electronic means, and such participation shall constitute presence in person.

5.5 Quorum. Partners holding a Majority Interest, present in person, by proxy, or by electronic means, shall constitute a quorum.

5.6 Action Without Meeting. Any action that may be taken at a meeting may be taken without a meeting if written consent is signed by Partners holding the requisite Percentage Interest.

5.7 Voting. Each Partner shall be entitled to vote in proportion to such Partner's Percentage Interest. This modifies the default rule of equal voting under MCL 449.18(e).

5.8 Minutes. Written minutes of each meeting shall be prepared and maintained.

ARTICLE 6. REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants to the other Partners and to the Partnership as of the Effective Date:

6.1 Capacity and Authority. Such Partner has full legal right, power, and authority to execute, deliver, and perform this Agreement. If an entity, it is duly organized, validly existing, and in good standing.

6.2 Enforceability. This Agreement constitutes the legal, valid, and binding obligation of such Partner, enforceable in accordance with its terms.

6.3 No Conflict. The execution and performance of this Agreement do not violate any law or agreement to which such Partner is a party.

6.4 Investment Purpose. Such Partner is acquiring its Partnership Interest for its own account, for investment purposes only.

6.5 Sophistication. Such Partner has had the opportunity to consult with independent advisers and has sufficient knowledge and experience to evaluate its investment.

6.6 Information. Such Partner has reviewed all information it considers necessary for evaluating the Partnership.

6.7 Michigan Compliance. Such Partner is familiar with the Act and other applicable Michigan laws and agrees to comply therewith.

6.8 Survival. The representations and warranties shall survive execution of this Agreement for the duration of the Partnership.

ARTICLE 7. COVENANTS AND RESTRICTIONS

7.1 Compliance with Law. The Partnership and each Partner shall comply in all material respects with all applicable federal, state (including Michigan), and local laws.

7.2 Fiduciary Duties. Each Partner acknowledges and agrees to the fiduciary duties owed to the Partnership and the other Partners under Michigan law, including the duty of loyalty (MCL 449.21) and the duty to render information (MCL 449.20).

7.3 Duty to Account. Every Partner must account to the Partnership for any benefit derived by the Partner without the consent of the other Partners from any transaction connected with the formation, conduct, or liquidation of the Partnership or from any use by the Partner of its property, pursuant to MCL 449.21.

7.4 Non-Compete. During the term of the Partnership and for a period of [____] months following a Partner's withdrawal or dissociation, no Partner shall, directly or indirectly, engage in, own, manage, operate, control, or participate in any business that is competitive with the Partnership's business within the following geographic area:

[________________________________]

This restriction shall apply only to the extent enforceable under Michigan law. Michigan courts apply a reasonableness test to non-compete covenants, considering duration, geographic scope, and type of activity restricted.

7.5 Confidentiality.

(a) Each Partner shall hold in strict confidence all proprietary, financial, and business information of the Partnership ("Confidential Information") and shall not disclose any Confidential Information to any third party without the prior written consent of a Majority Interest, except as required by law.

(b) This obligation shall survive the termination of this Agreement and any Partner's dissociation for a period of [____] years.

7.6 Non-Solicitation. During the term of the Partnership and for [____] months thereafter, no Partner shall solicit any customer, client, supplier, or employee of the Partnership for competitive purposes without the prior written consent of a Majority Interest.

7.7 Devotion of Time. Unless otherwise agreed in writing, each Partner shall devote such time and attention to the Partnership's business as is reasonably necessary.

7.8 Notice of Material Matters. Each Partner shall promptly notify the other Partners in writing of any material breach, any material adverse change, and any pending or threatened litigation.

ARTICLE 8. BOOKS, RECORDS, AND ACCOUNTING

8.1 Fiscal Year. The fiscal year of the Partnership (the "Fiscal Year") shall end on:

☐ December 31 of each year.

☐ [________________________________] of each year.

8.2 Method of Accounting. The Partnership's books and records shall be maintained on the:

☐ Cash basis of accounting.

☐ Accrual basis of accounting.

in accordance with GAAP consistently applied, or such other method as may be required by the Code.

8.3 Books and Records. Consistent with MCL 449.19, the Partnership books shall be kept at the principal place of business. The Partnership shall maintain complete and accurate records, including:

(a) A current list of Partners with contact information;
(b) A copy of this Agreement and amendments;
(c) Tax returns for the three (3) most recent Fiscal Years;
(d) Copies of Certificate of Copartnership and Assumed Name certificates;
(e) Financial statements for the three (3) most recent Fiscal Years; and
(f) Minutes of meetings and records of Partner actions.

8.4 Inspection Rights. Every Partner shall at all times have access to and may inspect and copy any of the Partnership books, consistent with MCL 449.19.

8.5 Financial Reports. The Partnership shall provide to each Partner:

(a) Within ninety (90) days after each Fiscal Year end, an annual financial statement;
(b) Within forty-five (45) days after each calendar quarter end, a quarterly summary; and
(c) Such other information as reasonably requested.

8.6 Duty to Render Information. Partners shall render on demand true and full information of all things affecting the Partnership to any Partner or the legal representative of any deceased or incapacitated Partner, pursuant to MCL 449.20.

8.7 Bank Accounts. All Partnership funds shall be deposited in accounts in the Partnership's name. Withdrawals shall require the signature of at least [____] Partner(s) or authorized Person(s).

8.8 Independent Accountant. The Partners may engage an independent CPA for annual audit or review at Partnership expense.

ARTICLE 9. INSURANCE AND RISK MANAGEMENT

9.1 Required Insurance Policies. The Partnership shall obtain and maintain:

(a) Commercial General Liability Insurance with per-occurrence limits of not less than $[________________________________] and aggregate limits of not less than $[________________________________];

(b) Commercial Property Insurance covering the Partnership's tangible property;

(c) Workers' Compensation Insurance as required by Michigan law (MCL 418.101 et seq.), if the Partnership has any employees;

(d) Professional Liability/Errors and Omissions Insurance (if applicable), with limits of not less than $[________________________________]; and

(e) Such other insurance as the Partners may determine appropriate.

9.2 Additional Insured. Each Partner shall be named as an additional insured to the extent commercially feasible.

9.3 Risk Management. The Partnership shall maintain appropriate risk management policies consistent with industry standards.

9.4 Review of Coverage. Insurance coverage shall be reviewed at least annually.

ARTICLE 10. INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Mutual Indemnification. Each Partner (the "Indemnifying Partner") shall indemnify, defend, and hold harmless the other Partners, the Partnership, and their respective heirs, executors, administrators, successors, and assigns from and against any and all losses, damages, liabilities, claims, judgments, settlements, penalties, fines, and expenses, including reasonable attorneys' fees and court costs (collectively, "Losses"), arising out of or relating to:

(a) Any breach of this Agreement;
(b) Gross negligence or willful misconduct in connection with the Partnership's business; or
(c) Any act outside the scope of authority under this Agreement.

10.2 Partnership Indemnification. The Partnership shall indemnify each Partner in respect of payments made and personal liabilities reasonably incurred in the ordinary and proper conduct of the Partnership's business or for the preservation of its business or property, consistent with MCL 449.18(b).

10.3 Advance of Expenses. The Partnership may advance expenses upon Majority Interest approval, subject to repayment.

10.4 Limitation of Liability.

(a) No Partner shall be liable to the Partnership or any other Partner for monetary damages except for (i) fraud, (ii) willful misconduct, (iii) a knowing violation of law, or (iv) improper personal benefit.

(b) The aggregate liability of any Partner under this Agreement shall not exceed:

☐ $[________________________________] (the "Liability Cap").

☐ No cap on liability.

10.5 Exculpation. No Partner shall be personally liable for any action taken in good faith reliance upon the records of the Partnership and upon information, opinions, reports, or statements presented by another Partner, an employee, or any professional adviser.

10.6 Third-Party Liability. All Partners are jointly and severally liable for Partnership debts and obligations under Michigan law (MCL 449.15). Nothing in this Agreement shall limit or affect the liability of Partners to third parties.

ARTICLE 11. TRANSFER OF INTERESTS; ADMISSION; WITHDRAWAL

11.1 Restrictions on Transfer. No Partner may Transfer all or any portion of its Partnership Interest without:

(a) The prior written consent of Partners holding at least [____]% of the non-transferring Percentage Interests;

(b) Compliance with applicable securities laws; and

(c) A legal opinion that the Transfer is exempt from registration.

11.2 Right of First Refusal.

(a) If a Partner receives a bona fide third-party offer, the Offering Partner shall provide ROFR Notice to the other Partners.

(b) The non-offering Partners shall have thirty (30) days to elect to purchase on the same terms, pro rata.

(c) If the right is not exercised, the Offering Partner may close with the third party within ninety (90) days.

11.3 Assignment of Interest. Consistent with MCL 449.27:

(a) A conveyance by a Partner of the Partner's interest in the Partnership does not by itself dissolve the Partnership;

(b) An assignee is entitled to receive the profits (but not to participate in management) to which the assigning Partner would be entitled; and

(c) An assignee does not become a Partner unless admitted as a new Partner pursuant to Section 11.4.

11.4 Admission of New Partners. New Partners may be admitted only with the unanimous written consent of all existing Partners and execution of a joinder agreement (Schedule C). Consistent with MCL 449.18(g), no person can become a member of a Partnership without the consent of all Partners.

11.5 Withdrawal.

(a) A Partner may voluntarily withdraw upon not less than ninety (90) days' prior written notice.

(b) Under Michigan law, dissolution is caused by the express will of any Partner when no definite term or particular undertaking is specified (MCL 449.31(1)(b)), unless the remaining Partners elect to continue pursuant to Section 12.6.

(c) In a partnership for a definite term, a Partner who withdraws before expiration is subject to MCL 449.38(2).

11.6 Purchase Upon Withdrawal. Upon a Partner's withdrawal, the remaining Partners may purchase the departing Partner's interest at fair market value.

11.7 Valuation.

(a) Fair market value shall be determined as of the Valuation Date.

(b) Partners shall endeavor to agree within thirty (30) days. Absent agreement, an independent appraiser shall determine the value.

(c) The cost shall be borne equally by the withdrawing Partner and the remaining Partners.

ARTICLE 12. DISSOCIATION; DISSOLUTION; WINDING UP

12.1 Causes of Dissolution. The Partnership shall dissolve upon the first to occur of the following events, consistent with MCL 449.31-32:

(a) Dissolution by Will. In a partnership at will, the express will of any Partner to dissolve (MCL 449.31(1)(b)), unless the remaining Partners elect to continue;

(b) Dissolution by Term Expiration. Expiration of the definite term or completion of the undertaking (MCL 449.31(1)(a));

(c) Dissolution by Agreement. Unanimous written agreement of all Partners;

(d) Dissolution by Expulsion. The expulsion of any Partner in accordance with this Agreement (MCL 449.31(1)(d)), unless the remaining Partners elect to continue;

(e) Dissolution by Illegality. An event making it unlawful to carry on the Partnership's business (MCL 449.31(3));

(f) Dissolution by Death or Bankruptcy. The death of any Partner (MCL 449.31(4)) or the bankruptcy of any Partner (MCL 449.31(5)), unless the remaining Partners elect to continue;

(g) Dissolution by Court Decree. A judicial decree of dissolution under MCL 449.32, which provides for dissolution when:
(i) A partner has been declared a lunatic or of unsound mind;
(ii) A partner becomes incapable of performing the partnership contract;
(iii) A partner has been guilty of conduct prejudicially affecting the business;
(iv) A partner willfully breaches the partnership agreement;
(v) The business can only be carried on at a loss; or
(vi) Other circumstances render dissolution equitable.

12.2 Effect of Dissolution. Upon dissolution, the Partnership ceases to carry on business except as needed to wind up, consistent with MCL 449.33.

12.3 Right to Wind Up. Partners who have not wrongfully caused dissolution have the right to wind up Partnership affairs (MCL 449.37).

12.4 Notice of Dissolution. Upon dissolution, the Partnership shall give notice to third parties in accordance with MCL 449.35, which addresses the power of Partners to bind the Partnership after dissolution.

12.5 Winding Up and Distribution.

(a) In settling accounts after dissolution, the liabilities shall be paid in the following order (MCL 449.40):

(i) Those owing to creditors other than Partners;
(ii) Those owing to Partners other than for capital and profits (i.e., Partner loans);
(iii) Those owing to Partners in respect of capital contributions; and
(iv) Those owing to Partners in respect of profits.

(b) If Partnership assets are insufficient, each Partner shall contribute toward the losses in the proportion in which the Partner shares in profits (MCL 449.40(d)).

12.6 Right to Continue Business. Notwithstanding Section 12.1, the remaining Partners may, within ninety (90) days after a dissolution event, elect by unanimous written agreement to continue the Partnership's business. In such event:

(a) The Partnership shall not be wound up;
(b) The interest of the departing Partner shall be purchased as set forth in Section 11.6;
(c) The continuing Partners shall have all rights to the Partnership name, assets, and goodwill; and
(d) The continuing Partners shall indemnify the departing Partner from future liabilities, consistent with MCL 449.36.

ARTICLE 13. DEFAULT AND REMEDIES

13.1 Events of Default. A "Default" occurs if a Partner (the "Defaulting Partner"):

(a) Materially breaches any provision of this Agreement and fails to cure within thirty (30) days of notice;

(b) Becomes insolvent or unable to pay debts as they become due;

(c) Files a voluntary petition in bankruptcy or is the subject of an involuntary petition not dismissed within sixty (60) days;

(d) Has a receiver, trustee, or custodian appointed for its assets;

(e) Engages in fraud, embezzlement, or criminal conduct relating to the Partnership; or

(f) Is convicted of a felony that materially affects the Partnership.

13.2 Remedies. Upon a Default, the non-defaulting Partners (the "Non-Defaulting Partners") may:

(a) Suspend the Defaulting Partner's management rights;

(b) Purchase the Defaulting Partner's interest at the lesser of fair market value or book value;

(c) Offset damages against amounts distributable to the Defaulting Partner;

(d) Expel the Defaulting Partner by unanimous vote; or

(e) Pursue any other remedy at law or in equity.

13.3 Cumulative Remedies. Remedies are cumulative.

13.4 Attorneys' Fees. The prevailing party shall be entitled to reasonable attorneys' fees and costs.

ARTICLE 14. RISK ALLOCATION

14.1 Insurance. See Article 9.

14.2 Force Majeure. Neither the Partnership nor any Partner shall be liable for any failure or delay in performance (other than payment obligations) caused by events beyond reasonable control, including natural disasters, fire, flood, severe weather, epidemic or pandemic, war, terrorism, labor disputes, governmental actions, power outages, or disruption of transportation (each, a "Force Majeure Event"); provided that:

(a) The affected party gives prompt written notice;
(b) The affected party uses commercially reasonable efforts to mitigate; and
(c) The affected party resumes performance as soon as reasonably practicable.

14.3 Mitigation. Each party shall use commercially reasonable efforts to mitigate Losses.

ARTICLE 15. DISPUTE RESOLUTION

15.1 Negotiation. The Partners shall first attempt to resolve any Dispute by good faith negotiation within thirty (30) days after a written Dispute Notice.

15.2 Mediation. If unresolved, the Partners shall submit to mediation administered by the AAA in [________________________________], Michigan.

15.3 Mandatory Arbitration. If not resolved within sixty (60) days, the Dispute shall be submitted to binding arbitration under the AAA Commercial Arbitration Rules:

(a) Seat. [________________________________], Michigan.

(b) Arbitrator. One (1) arbitrator with at least ten (10) years of experience in partnership or commercial disputes.

(c) Award. A reasoned written award within thirty (30) days after the close of the hearing.

(d) Governing Law. Michigan law (without conflicts-of-law principles).

15.4 Injunctive Relief and Exclusive Jurisdiction.

(a) Any Partner may seek injunctive relief in the state or federal courts located in [________________________________] County, Michigan (the "Exclusive Jurisdiction Courts").

(b) Each Partner waives any objection to venue or personal jurisdiction.

15.5 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTNER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

15.6 Confidentiality of Proceedings. All mediation and arbitration proceedings shall be confidential.

15.7 Enforcement of Award. Judgment on the award may be entered in any court of competent jurisdiction.

ARTICLE 16. GENERAL PROVISIONS

16.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, including the Act, without regard to conflicts-of-law principles.

16.2 Amendments. This Agreement may be amended only by a written instrument executed by all Partners.

16.3 Waiver. No failure or delay in exercising any right shall operate as a waiver thereof.

16.4 Entire Agreement. This Agreement (including the Schedules) constitutes the entire agreement among the Partners and supersedes all prior agreements.

16.5 Severability. If any provision is held invalid, the remaining provisions shall remain in full force and effect.

16.6 Successors and Assigns. This Agreement shall bind and benefit the Partners and their respective heirs, executors, administrators, legal representatives, successors, and permitted assigns.

16.7 Notices. All notices shall be in writing and deemed given upon:

(a) Personal delivery (upon receipt);
(b) Overnight courier (one (1) business day after deposit);
(c) Email with confirmed receipt (upon confirmation during business hours); or
(d) Certified mail, return receipt requested (three (3) business days after deposit).

All notices shall be addressed to the Partner at the address on Schedule A.

16.8 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts. Electronic signatures shall be binding.

16.9 Interpretation. Headings are for convenience only. "Including" means "including without limitation."

16.10 No Third-Party Beneficiaries. Nothing herein is intended to confer rights on any Person other than the Partners.

16.11 Further Assurances. Each Partner shall execute such additional documents as may be reasonably necessary.

16.12 Construction. No provision shall be construed against any Partner solely because that Partner drafted it.

ARTICLE 17. MICHIGAN-SPECIFIC PROVISIONS

17.1 Governing Statute.

Michigan's Uniform Partnership Act (Act 72 of 1917) is codified at MCL 449.1 through 449.48. This statute governs general partnerships in Michigan. Michigan has not adopted the Revised Uniform Partnership Act (RUPA) for general partnerships. This Agreement is governed by MCL 449.1 et seq.

17.2 Certificate of Copartnership (MCL 449.44).

(a) Under Michigan's original UPA, Partners may file a Certificate of Copartnership with the county clerk of each county where the Partnership conducts business. The certificate authorizes the Partners to conduct business for a period of five (5) years.

(b) The Certificate of Copartnership must be acknowledged (notarized) and include the names of all Partners, the Partnership name, the principal place of business, and the duration of the Partnership.

(c) Within ninety (90) days before expiration, a renewal certificate may be filed. The county clerk filing fee is $10.00 (subject to change).

17.3 Assumed Name Requirements.

(a) County-Level Filing. Under MCL 445.1 (Act 101 of 1907), if the Partnership operates under a name other than the true names of all Partners, a "Certificate of Persons Conducting Business Under Assumed Name" must be filed with the county clerk of each county where business is conducted.

(b) State-Level Filing. The Partnership may file a Certificate of Assumed Name with LARA using Form CSCL/CD-541.

(c) Duration. The assumed name certificate is valid for five (5) years and may be renewed.

(d) Filing Fee. The filing fee with LARA is $10.00 per MCL 449.2107 (for limited partnerships; verify current fees for general partnerships). County clerk fees vary by county.

Note: Fees are approximate and subject to change. Verify current fees with the applicable county clerk or LARA.

17.4 Michigan Tax Obligations.

(a) No State-Level Partnership Income Tax. Michigan does not impose a state-level income tax on partnerships. Michigan's individual income tax is a flat rate (currently 4.25%), and each Partner reports their distributive share of Partnership income on their individual Michigan income tax return (Form MI-1040).

(b) No Partnership Information Return Required at State Level. Unlike many states, Michigan does not require partnerships to file a separate partnership information return at the state level. Partnership income flows through to the individual Partners via the federal Schedule K-1.

(c) Michigan Business Tax / Corporate Income Tax. The Michigan Corporate Income Tax (CIT) generally does not apply to partnerships. However, if the Partnership has corporate partners, those corporate partners must include their share of Partnership income on their Michigan CIT returns.

(d) IMPORTANT: Michigan City Income Tax. Michigan is unique in that over 20 cities impose a city income tax on businesses, including partnerships, that earn income within city boundaries. Cities imposing income tax include but are not limited to:

Note: Rates are approximate and subject to change. All cities except Detroit use the Common Form CF-1065. Detroit uses its own Form D-1065.

(e) City Income Tax Filing. If the Partnership earns income within a city that imposes an income tax, the Partnership must file a partnership return (CF-1065 or D-1065, as applicable) with that city. The Partnership may elect to pay the city income tax on behalf of all Partners, or require each Partner to pay individually. If the Partnership does not pay on behalf of Partners, it must still file an informational return.

(f) Withholding for Nonresident Partners. The Partnership should consider withholding city income tax on behalf of nonresident Partners earning income within a taxing city.

(g) Personal Property Tax. Michigan exempts most commercial and industrial personal property from the personal property tax for qualifying property, but certain categories may still be taxable. Partners should consult with a tax adviser regarding any personal property tax obligations.

(h) Sales Tax. If the Partnership sells tangible personal property in Michigan, it must register with the Michigan Department of Treasury and collect and remit Michigan sales tax (currently 6%).

17.5 Partner Liability Under Michigan Law.

(a) Joint and Several Liability (Original UPA — MCL 449.15). Under the original UPA, all Partners are jointly and severally liable for everything chargeable to the Partnership under MCL 449.13 (wrongful acts) and MCL 449.14 (breach of trust). For all other debts and obligations, Partners are jointly liable (MCL 449.15(b)).

(b) Incoming Partner Liability. Under MCL 449.17, a person admitted as a Partner is liable for all obligations of the Partnership arising before admission, but this liability may only be satisfied out of Partnership property.

17.6 Dissolution Under Michigan Law.

(a) Under Michigan's original UPA (MCL 449.31-38), dissolution may be caused by:
(i) Termination of the definite term or particular undertaking;
(ii) Express will of any Partner in a partnership at will;
(iii) Express will of all Partners;
(iv) Expulsion of a Partner pursuant to the Partnership agreement;
(v) Illegality;
(vi) Death of any Partner;
(vii) Bankruptcy of any Partner; or
(viii) Court decree under MCL 449.32.

(b) Upon dissolution, the Partnership must settle accounts as set forth in MCL 449.40.

17.7 Liability of Continuing Partners (MCL 449.36 and 449.41).

(a) When a Partner retires or dies and the remaining Partners continue the business without liquidation, creditors of the old Partnership are creditors of the Person or Partnership continuing the business (MCL 449.41).

(b) When a Partner wrongfully dissolves the Partnership, the remaining Partners may continue the business and pay the wrongfully dissolving Partner the value of the Partner's interest, less any damages caused by the wrongful dissolution (MCL 449.38(2)).

17.8 LARA Contact Information and Resources.

ARTICLE 18. EXECUTION

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

PARTNER SIGNATURES

Partner 1:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner 2:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner 3 (if applicable):

Name: [________________________________]
Title (if entity): [________________________________]

Signature: ___________________________________________

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

NOTARY ACKNOWLEDGMENT

STATE OF MICHIGAN
COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned Notary Public in and for said County and State, personally appeared:

[________________________________]
[________________________________]
[________________________________]

personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public: ___________________________________________

Printed Name: [________________________________]

County of: [________________________________]

My Commission Expires: [__/__/____]

Acting in the County of: [________________________________]

[NOTARY SEAL]

SCHEDULE A

PARTNERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

Total Capital Contributions: $[________________________________]
Total Percentage Interests: 100%

SCHEDULE B

ADDITIONAL PARTNER OBLIGATIONS AND SERVICES

SCHEDULE C

FORM OF JOINDER AGREEMENT

JOINDER TO GENERAL PARTNERSHIP AGREEMENT

The undersigned (the "New Partner") hereby agrees to become a Partner in [________________________________] (the "Partnership") and to be bound by all terms and conditions of the General Partnership Agreement dated [__/__/____] (as amended, the "Agreement"), as if the New Partner were an original signatory thereto.

Capital Contribution: $[________________________________]
Percentage Interest: [____]%
Effective Date of Admission: [__/__/____]

The New Partner makes the representations and warranties set forth in Article 6 of the Agreement as of the date hereof.

NEW PARTNER:

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]
Address: [________________________________]

ACKNOWLEDGED AND ACCEPTED BY EXISTING PARTNERS:

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]

Name: [________________________________]
Signature: ___________________________________________
Date: [__/__/____]

SCHEDULE D

MICHIGAN FILING AND COMPLIANCE CHECKLIST

☐ File Certificate of Copartnership with county clerk(s) (MCL 449.44) — Fee: ~$10.00 per county
☐ File Certificate of Assumed Name with county clerk(s) (MCL 445.1) if operating under assumed name — Fee: varies
☐ File Certificate of Assumed Name with LARA — Fee: ~$10.00
☐ Obtain Federal Employer Identification Number (EIN) from IRS
☐ Register with Michigan Department of Treasury for state tax purposes
☐ Determine whether Partnership operates in any Michigan city that imposes a city income tax
☐ File city partnership income tax returns (CF-1065 or D-1065) for each applicable city
☐ Furnish Schedule K-1 and city tax information to each Partner
☐ Register for Michigan sales tax collection (if applicable) — 6% sales tax
☐ Obtain any required local business licenses and permits
☐ Obtain required insurance coverage (see Article 9)
☐ Comply with Michigan workers' compensation requirements (MCL 418.101 et seq.)
☐ Open Partnership bank account(s)
☐ Renew Certificate of Copartnership within 90 days before five-year expiration
☐ Renew assumed name certificate before five-year expiration
☐ Verify compliance with Michigan UPA (MCL 449.1 et seq.)

DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. This template should be reviewed and customized by a qualified attorney licensed in the State of Michigan before use. Laws and regulations are subject to change. Michigan enacted the Michigan Revised Uniform Partnership Act (PA 2023, No. 37, effective March 29, 2025), which may affect certain provisions of this Agreement. Counsel should confirm which statute governs this Partnership based on the formation date and applicable transition provisions. The city income tax rates and requirements referenced herein should be verified with each applicable city at the time of use. Do not execute this document without professional legal review. Use of this template does not create an attorney-client relationship with the template provider.

Prepared for use on the ezel.ai platform. Last updated: 2026-02-27.