Partnership Agreement - General (South Dakota)

GENERAL PARTNERSHIP AGREEMENT

STATE OF SOUTH DAKOTA

THIS GENERAL PARTNERSHIP AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and among the undersigned parties (each a "Partner" and collectively the "Partners"):

Partner A: [________________________________] (Full Legal Name), a resident of [________________________________] County, South Dakota / a [________________________________] (entity type) organized under the laws of [____]

Partner B: [________________________________] (Full Legal Name), a resident of [________________________________] County, South Dakota / a [________________________________] (entity type) organized under the laws of [____]

Partner C (if applicable): [________________________________] (Full Legal Name), a resident of [________________________________] County, South Dakota / a [________________________________] (entity type) organized under the laws of [____]

The Partners hereby form a general partnership (the "Partnership") pursuant to and governed by the South Dakota Uniform Partnership Act, SDCL Chapter 48-7A (the "Act"), and upon the following terms and conditions.

RECITALS

A. The Partners desire to associate themselves as partners in a general partnership for the purposes described herein;

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

C. The Partners wish to set forth in writing their respective rights, obligations, and duties with respect to the Partnership;

D. The Partners intend that this Partnership shall be governed by the South Dakota Uniform Partnership Act (SDCL Chapter 48-7A), which is based on the Revised Uniform Partnership Act (RUPA), and that this Agreement shall supplement and, where permitted by the Act, supersede the default provisions thereof;

E. The Partners acknowledge that South Dakota imposes no state individual or corporate income tax, making it a particularly favorable jurisdiction for partnership operations; and

F. The Partners have had the opportunity to seek independent legal and tax counsel regarding this Agreement and the formation of the Partnership.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for 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. Dispute Resolution
15. General Provisions
16. South Dakota-Specific Provisions
17. Execution and Signature Blocks

ARTICLE 1: DEFINITIONS

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

"AAA" means the American Arbitration Association.

"Act" means the South Dakota Uniform Partnership Act, SDCL Chapter 48-7A, as amended from time to time.

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

"Agreement" means this General Partnership Agreement, including all Schedules and Exhibits, as amended from time to time.

"Bankruptcy" means, with respect to any Partner, (i) the filing of a voluntary petition or the entry of an order for relief under the United States Bankruptcy Code, (ii) the making of a general assignment for the benefit of creditors, (iii) the appointment of a receiver, custodian, or trustee for all or substantially all assets, or (iv) any similar proceeding.

"Capital Account" means, for each Partner, the account maintained in accordance with Section 4.1(c) and Treasury Regulations Section 1.704-1(b)(2)(iv).

"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, as set forth on Schedule A.

"Code" means the Internal Revenue Code of 1986, as amended.

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

"Dissociation" has the meaning set forth in SDCL Section 48-7A-601 and Section 12.1 of this Agreement.

"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 15.10.

"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.

"Net Cash Flow" means the gross cash receipts of the Partnership less all cash expenditures, debt service payments, and reasonable reserves as determined by the Partners.

"Partner" and "Partners" have the meanings set forth in the preamble.

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

"Partnership Interest" means a Partner's entire interest in the Partnership, including such Partner's right to distributions, allocations of Profits and Losses, and right to participate in management.

"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, association, or other entity.

"Profits" and "Losses" mean, for each Fiscal Year, the Partnership's taxable income or loss as determined under Code Section 703(a), with appropriate adjustments.

"Secretary of State" means the South Dakota Secretary of State.

"Statement" means a statement of partnership authority under SDCL Section 48-7A-303, a statement of denial under SDCL Section 48-7A-304, a statement of dissociation under SDCL Section 48-7A-704, a statement of dissolution under SDCL Section 48-7A-805, or a statement of merger under SDCL Section 48-7A-907, as applicable.

"Supermajority Interest" means Partners holding at least seventy-five percent (75%) of the aggregate Percentage Interests.

"Transfer" has the meaning set forth in Section 11.1.

"Treasury Regulations" means the federal income tax regulations promulgated under the Code, as amended.

"Transferable Interest" means a Partner's share of the profits and losses of the Partnership and the Partner's right to receive distributions, as defined in SDCL Section 48-7A-101.

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 South Dakota, effective as of the Effective Date, pursuant to the South Dakota Uniform Partnership Act (SDCL Chapter 48-7A). The Partnership is formed by the association of two or more Persons to carry on as co-owners a business for profit, as defined in SDCL Section 48-7A-101(6). No filing with the South Dakota Secretary of State is required for the formation of a general partnership.

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

[________________________________]

or such other name as the Partners may unanimously approve in writing. If the Partnership operates under a name other than the true names of the Partners, the Partnership shall comply with all applicable assumed business name requirements under South Dakota law.

2.3 Purpose. The purpose of the Partnership is to:

[________________________________]
[________________________________]

and to engage in any and all lawful activities incidental, necessary, or ancillary thereto.

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

[________________________________]
[________________________________]
[________________________________] County, South Dakota [____]

or at such other location as the Partners may from time to time determine by Majority Interest vote.

2.5 Registered Agent. If the Partnership files a Statement of Partnership Authority, registers as a limited liability partnership, or is otherwise required to designate a registered agent, the registered agent shall be:

Registered Agent: [________________________________]
Registered Office: [________________________________], South Dakota [____]

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

☐ In perpetuity, until dissolved in accordance with Article 12; or
☐ For a fixed term of [________________________________] years, commencing on the Effective Date, unless earlier dissolved in accordance with Article 12.

2.7 Entity Status. Under the South Dakota Uniform Partnership Act (SDCL Section 48-7A-201), a partnership is an entity distinct from its partners. The Partnership may hold property in its own name, sue and be sued, and enter into contracts in its own name.

ARTICLE 3: CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions. Each Partner shall contribute the Capital Contribution set forth opposite such Partner's name on Schedule A on or before the Effective Date. Initial Capital Contributions may be in the form of cash, property, or services as agreed and reflected 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 Partnership requires additional capital, the Partners may contribute pro rata in accordance with their Percentage Interests or as otherwise unanimously agreed.

(c) A Partner who contributes additional capital when other Partners decline shall have their Percentage Interest adjusted accordingly by mutual agreement or independent valuation.

(d) A Partner who fails to make a required additional Capital Contribution within [____] days of written notice shall be deemed a Defaulting Partner under Section 13.1.

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

(a) Increased by such Partner's Capital Contributions and allocations of Profits; and
(b) Decreased by distributions to such Partner and allocations of Losses.

3.4 No Interest on Capital. No Partner shall be entitled to receive interest on any Capital Contribution or Capital Account balance, unless otherwise unanimously agreed in writing.

3.5 Withdrawal of Capital. Except as expressly provided herein, no Partner may withdraw any part of its Capital Contribution without the written consent of all other Partners.

3.6 Loans by Partners. Any Partner may, with Majority Interest consent, lend funds to the Partnership at an interest rate of [____]% per annum (or the applicable federal rate, whichever is greater). Partner loans shall be repaid before any distributions to Partners.

3.7 Return of Capital. No Partner shall have the right to demand return of its Capital Contribution except upon dissolution and winding up under Article 12. Under SDCL Section 48-7A-401(h), a Partner is not entitled to remuneration for services performed for the Partnership except reasonable compensation for services rendered in winding up the business.

ARTICLE 4: ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS

4.1 Allocations of Profits and Losses.

(a) General Rule. Profits and Losses for each Fiscal Year shall be allocated among the Partners in proportion to their respective Percentage Interests.

(b) Substantial Economic Effect. The Partners intend that allocations satisfy the "substantial economic effect" test under Treasury Regulations Section 1.704-1(b). Any allocation lacking substantial economic effect shall be made in accordance with each Partner's interest in the Partnership under Treasury Regulations Section 1.704-1(b)(3).

(c) Capital Account Adjustments. Capital Accounts shall be maintained and adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv).

(d) Regulatory Allocations. The following special allocations apply:

(i) Minimum Gain Chargeback. If there is a net decrease in partnership minimum gain during any Fiscal Year, each Partner shall receive allocations of income and gain as required by Treasury Regulations Section 1.704-2(f).

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

(iii) Nonrecourse Deductions. Nonrecourse deductions shall be allocated among the Partners in proportion to their Percentage Interests.

4.2 Distributions.

(a) Timing and Amount. Distributions of Net Cash Flow shall be made at such times and in such amounts as determined by Majority Interest vote, but no less frequently than [quarterly / annually].

(b) Priority. All distributions shall be made pro rata in accordance with Percentage Interests.

(c) Limitation. No distribution shall be made if it would render the Partnership unable to pay its debts as they become due in the ordinary course, consistent with SDCL Section 48-7A-401.

(d) Tax Distributions. The Partnership shall distribute to each Partner an amount reasonably estimated to cover such Partner's federal tax liability arising from Partnership income allocated to such Partner. Note: South Dakota imposes no state individual or corporate income tax; accordingly, no state tax distributions are required for South Dakota resident Partners.

4.3 Withholding. The Partnership is authorized to withhold from distributions any amounts required under applicable federal tax laws. Because South Dakota has no state income tax, no state-level withholding is applicable for South Dakota operations. However, if the Partnership conducts business in other states, withholding may be required under those states' laws.

4.4 Tax Elections. The Partnership shall make the following tax elections:

☐ Election under Code Section 754 to adjust basis of Partnership property upon transfer of a Partnership Interest or distribution of Partnership property

☐ Election to use the [cash / accrual] method of accounting

☐ Such other elections as the Partnership Representative deems appropriate

4.5 Partnership Representative. [________________________________] is designated as the "Partnership Representative" within the meaning of Code Section 6223. The Partnership Representative shall:

(a) Have full authority to act on behalf of the Partnership in connection with any federal tax audit or proceeding;
(b) Keep all Partners reasonably informed of any tax proceedings;
(c) Use commercially reasonable efforts to make the push-out election under Code Section 6226 if available; and
(d) Be subject to removal and replacement by Majority Interest vote.

4.6 Tax Returns. The Partnership shall prepare and timely file:

(a) IRS Form 1065 (U.S. Return of Partnership Income);
(b) Schedule K-1 to each Partner no later than March 15 of each year; and
(c) Any informational returns required by states where the Partnership conducts business (note: South Dakota does not require a state partnership income tax return because it has no state income tax).

ARTICLE 5: MANAGEMENT; VOTING; MEETINGS

5.1 Management.

☐ Option A: Partner-Managed. The Partnership shall be managed by all Partners collectively. Each Partner shall have an equal right to participate in management, subject to the voting requirements herein.

☐ Option B: Managing Partner. The Partnership shall be managed by [________________________________] (the "Managing Partner"), who shall have authority over day-to-day operations subject to the limitations in this Article 5.

5.2 Authority of Partners. Under SDCL Section 48-7A-301, each Partner is an agent of the Partnership for the purpose of its business. An act of a Partner for apparently carrying on in the ordinary course the Partnership business or business of the kind carried on by the Partnership binds the Partnership, unless the Partner had no authority and the person with whom the Partner dealt knew or had received notification of the Partner's lack of authority.

5.3 Ordinary Decisions. Unless otherwise stated herein, any decision regarding the ordinary business of the Partnership requires the affirmative vote of Partners holding a Majority Interest. Under SDCL Section 48-7A-401(j), a difference arising as to a matter in the ordinary course of business may be decided by a majority of the Partners.

5.4 Major Decisions. The following actions require the unanimous written consent of all Partners (consistent with SDCL Section 48-7A-401(j), which requires consent of all Partners for acts outside the ordinary course):

(a) Amendment of this Agreement;
(b) Admission of a new Partner;
(c) Sale, lease, or disposition of all or substantially all Partnership assets;
(d) Merger, conversion, or reorganization (pursuant to SDCL Section 48-7A-901 et seq.);
(e) Voluntary dissolution;
(f) Entry into any contract or obligation exceeding $[________________________________];
(g) Incurrence of indebtedness exceeding $[________________________________];
(h) Filing a Statement of Partnership Authority with the Secretary of State;
(i) Conversion to a limited liability partnership or other entity type;
(j) Commencement or settlement of litigation involving claims exceeding $[________________________________];
(k) Any change in the purpose of the Partnership; and
(l) Any act outside the ordinary course of business.

5.5 Meetings.

(a) Regular Meetings. Regular meetings shall be held at least [quarterly / annually] at the principal office or as otherwise agreed.

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

(c) Electronic Participation. Partners may participate by telephone, videoconference, or other electronic means permitting simultaneous communication.

5.6 Quorum. Partners holding a Majority Interest, present in person, by proxy, or electronically, constitute a quorum.

5.7 Action Without Meeting. Any action may be taken without a meeting if consented to in writing by Partners holding the requisite voting interest.

5.8 Minutes. Written minutes shall be maintained for all meetings and available for Partner inspection.

5.9 Officers and Agents. The Partners may appoint officers, employees, and agents by Majority Interest vote and delegate specific authority to such persons.

ARTICLE 6: REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants to the other Partners, as of the Effective Date and as of each date such Partner acquires an additional Partnership Interest:

6.1 Authority. Such Partner has full legal right, power, and authority to execute and perform this Agreement. If an entity, it is duly organized and in good standing under the laws of its jurisdiction.

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. Execution and performance of this Agreement do not violate any law, rule, or agreement binding on such Partner.

6.4 No Litigation. There is no pending or threatened litigation that would materially affect such Partner's ability to perform under this Agreement.

6.5 Investment Purpose. Such Partner is acquiring its Partnership Interest for investment and not for distribution or resale in violation of securities laws.

6.6 Sophistication. Such Partner is experienced in business investments and has had the opportunity to consult independent legal, tax, and financial advisors.

6.7 Tax Status Acknowledgment. Such Partner acknowledges that South Dakota does not impose a state income tax, but that the Partner may be subject to income tax in other jurisdictions on income derived from the Partnership.

6.8 Survival. The representations and warranties in this Article 6 survive for so long as such Partner remains a Partner.

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, and local laws, including the South Dakota Uniform Partnership Act.

7.2 Non-Competition.

(a) During the term of the Partnership and for [____] months following a Partner's withdrawal, dissociation, or dissolution, no Partner shall engage in any business competitive with the Partnership within [________________________________].

(b) South Dakota courts evaluate restrictive covenants for reasonableness under established case law, considering duration, geographic scope, and scope of restricted activity. The Partners agree that the restrictions in this Section are reasonable and necessary.

(c) This covenant shall not prohibit passive ownership of less than five percent (5%) of the securities of any publicly traded company.

7.3 Non-Solicitation. During the Partnership term and for [____] months following withdrawal or dissociation, no Partner shall solicit employees, contractors, or customers of the Partnership.

7.4 Confidentiality.

(a) Each Partner shall maintain the confidentiality of all proprietary and confidential information of the Partnership ("Confidential Information").

(b) This obligation survives the termination of the Partnership for [____] years.

(c) Exceptions: information that becomes publicly available, was previously known, or is required to be disclosed by law.

7.5 Duty of Loyalty. Under SDCL Section 48-7A-404(b), each Partner's duty of loyalty includes:

(a) To account to the Partnership and hold as trustee for it any property, profit, or benefit derived in the conduct of the Partnership business or from a use of Partnership property, including the appropriation of a Partnership opportunity;

(b) To refrain from dealing with the Partnership in the conduct of the Partnership business as, or on behalf of, a party having an interest adverse to the Partnership; and

(c) To refrain from competing with the Partnership in the conduct of the Partnership business.

7.6 Duty of Care. Under SDCL Section 48-7A-404(c), a Partner's duty of care to the Partnership is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

7.7 Good Faith and Fair Dealing. Under SDCL Section 48-7A-404(d), each Partner shall discharge duties consistent with the obligation of good faith and fair dealing.

7.8 Notice of Material Events. Each Partner shall promptly notify all other Partners of any material breach, material adverse change, threatened litigation, or dissolution event.

ARTICLE 8: BOOKS, RECORDS, AND ACCOUNTING

8.1 Fiscal Year. The Fiscal Year shall end on [________________________________] of each year.

8.2 Method of Accounting. The Partnership shall use the [cash / accrual] method of accounting in accordance with GAAP consistently applied.

8.3 Books and Records. The Partnership shall maintain at its principal office complete and accurate books and records, including:

(a) A current list of Partners, addresses, and Percentage Interests;
(b) Copies of federal tax returns for the current and prior three (3) Fiscal Years;
(c) Copies of this Agreement and all amendments;
(d) Financial statements for the current and prior three (3) Fiscal Years;
(e) Records of Capital Contributions, distributions, and Capital Account balances;
(f) Minutes of meetings and records of actions without meetings; and
(g) All records required by the Act.

8.4 Inspection Rights. Under SDCL Section 48-7A-403, each Partner and the Partner's agent or attorney has the right to inspect and copy during ordinary business hours the Partnership's books and records, and the Partnership shall provide former Partners and their agents access to books and records pertaining to the period during which they were Partners.

8.5 Financial Reports. The Partnership shall furnish:

(a) Quarterly unaudited financial statements within thirty (30) days of each quarter end; and
(b) Annual financial statements within ninety (90) days of each Fiscal Year end.

8.6 Bank Accounts. All Partnership funds shall be deposited in accounts in the Partnership's name. Withdrawals require the signature of [________________________________].

8.7 Independent Auditor. The Partners may engage an independent CPA by Majority Interest vote.

ARTICLE 9: INSURANCE AND RISK MANAGEMENT

9.1 Required Insurance. The Partnership shall maintain:

(a) Commercial General Liability Insurance with minimum limits of $[________________________________] per occurrence and $[________________________________] aggregate;

(b) Property Insurance at replacement cost;

(c) Professional Liability Insurance (if applicable) with minimum limits of $[________________________________];

(d) Workers' Compensation Insurance as required by South Dakota law (SDCL Chapter 62-1 et seq.); and

(e) Such other insurance as the Partners deem appropriate.

9.2 Additional Insureds. Each Partner shall be named as an additional insured where commercially feasible.

9.3 Annual Review. Insurance coverage shall be reviewed at least annually.

9.4 Risk Management. The Partnership shall maintain appropriate risk management policies.

ARTICLE 10: INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Mutual Indemnification. Each Partner (the "Indemnifying Partner") shall indemnify, defend, and hold harmless the other Partners and the Partnership from all losses, damages, liabilities, claims, judgments, costs, and expenses, including reasonable attorneys' fees (collectively, "Losses"), arising from:

(a) Breach of this Agreement by the Indemnifying Partner;
(b) Fraud, gross negligence, or willful misconduct of the Indemnifying Partner;
(c) Acts or omissions outside the scope of authority; or
(d) Violation of applicable law by the Indemnifying Partner.

10.2 Partnership Indemnification. The Partnership shall indemnify each Partner against Losses incurred in the proper conduct of Partnership business, except for Losses caused by such Partner's fraud, gross negligence, or willful misconduct. Under SDCL Section 48-7A-401(c), the Partnership shall reimburse a Partner for payments made and indemnify a Partner for liabilities incurred by the Partner in the ordinary course of the business of the Partnership.

10.3 Advance of Expenses. The Partnership may advance expenses for defense of indemnified claims, subject to repayment if indemnification is ultimately denied.

10.4 Limitation of Liability.

(a) No Partner shall be liable for monetary damages for acts or omissions as a Partner except for breach of loyalty, fraud, intentional misconduct, knowing violation of law, or improper personal benefit.

(b) Aggregate liability cap:

☐ Unlimited (default under South Dakota general partnership law)
☐ $[________________________________] (Note: Does not limit third-party liability)

10.5 Third-Party Liability. Under SDCL Section 48-7A-306, all Partners are liable jointly and severally for all obligations of the Partnership, unless otherwise provided by law. A claim against the Partnership may also be asserted directly against a Partner, subject to SDCL Section 48-7A-307 (exhaustion of Partnership assets requirement).

10.6 Exhaustion Requirement. Under SDCL Section 48-7A-307, a judgment against the Partnership is not by itself a judgment against a Partner. A judgment against a Partner may not be satisfied from a Partner's assets unless the court has entered a separate judgment against the Partner, and either (i) the Partnership's assets have been exhausted, (ii) the Partnership is a debtor in bankruptcy, or (iii) the Partner has agreed that the creditor need not exhaust Partnership assets.

10.7 Exculpation. No Partner shall be liable for errors in judgment or acts or omissions believed in good faith to be within the scope of authority conferred by this Agreement.

ARTICLE 11: TRANSFER OF INTERESTS; ADMISSION; WITHDRAWAL

11.1 Restrictions on Transfer. No Partner may sell, assign, pledge, or otherwise transfer ("Transfer") all or any portion of its Partnership Interest without:

(a) Compliance with applicable securities laws;
(b) Prior written consent of Partners holding at least [____]% of non-transferring Percentage Interests; and
(c) The transferee executing a joinder agreement.

11.2 Transferable Interest. Under SDCL Section 48-7A-502, the only transferable interest of a Partner in the Partnership is the Partner's share of profits and losses and the Partner's right to receive distributions (the "Transferable Interest"). A transfer of the Transferable Interest does not entitle the transferee to participate in management or to access Partnership books and records.

11.3 Right of First Refusal.

(a) If a Partner receives a bona fide third-party offer, the Partner shall first offer the interest to remaining Partners on the same terms.

(b) The remaining Partners shall have [____] days to exercise the right.

(c) If the right is not exercised, the transfer may proceed on terms no more favorable to the third party.

11.4 Permitted Transfers. A Partner may Transfer without consent to a revocable trust, family member, or wholly owned entity, provided the transferee agrees to be bound by this Agreement.

11.5 Admission of New Partners. New Partners require unanimous consent, execution of a joinder, and amendment of Schedule A.

11.6 Withdrawal.

(a) A Partner may withdraw upon ninety (90) days' prior written notice.

(b) Under SDCL Section 48-7A-602, a Partner has the power to dissociate at any time by express will, but withdrawal may be wrongful if it breaches an express provision of the Agreement.

(c) If wrongful, the withdrawing Partner is liable to the Partnership for damages caused and is not entitled to payment until the term expires, less damages.

ARTICLE 12: DISSOCIATION; DISSOLUTION; WINDING UP

12.1 Events of Dissociation. A Partner is dissociated from the Partnership upon the occurrence of any of the following, consistent with SDCL Section 48-7A-601:

(a) The Partnership's receipt of notice of the Partner's express will to withdraw;
(b) An event agreed to in this Agreement;
(c) Expulsion by unanimous vote of the other Partners if:
(i) It is unlawful to carry on business with such Partner;
(ii) All of the Partner's Transferable Interest has been transferred;
(iii) The Partner is an entity that has been dissolved and winding up has not been completed; or
(iv) The Partner has engaged in conduct making it not reasonably practicable to carry on business with such Partner;
(d) Expulsion by judicial determination under SDCL Section 48-7A-601(5);
(e) The Partner's Bankruptcy;
(f) Death of an individual Partner or appointment of a guardian/conservator;
(g) Termination of a trust or estate that is a Partner; or
(h) Dissolution of an entity Partner.

12.2 Effect of Dissociation.

(a) The dissociated Partner's management and voting rights terminate;
(b) The Partner's duties of loyalty and care end, except as to matters arising before dissociation;
(c) If the business continues, the dissociated Partner's interest shall be purchased in accordance with SDCL Section 48-7A-701 and Section 12.5 below; and
(d) Under SDCL Section 48-7A-703, a dissociated Partner's lingering apparent authority to bind the Partnership terminates two (2) years after dissociation.

12.3 Statement of Dissociation. Upon dissociation, the Partnership may file a Statement of Dissociation with the South Dakota Secretary of State pursuant to SDCL Section 48-7A-704, which limits the dissociated Partner's authority ninety (90) days after filing.

12.4 Dissolution Events. The Partnership shall dissolve upon the first to occur of, consistent with SDCL Section 48-7A-801:

(a) In a partnership at will, the Partnership's receipt of notice of a Partner's express will to withdraw (unless within ninety (90) days after the dissociation a Majority Interest agrees to continue);

(b) In a partnership for a definite term or particular undertaking:
(i) Within ninety (90) days after a Partner's dissociation by death, Bankruptcy, wrongful dissociation, or judicial expulsion, the express will of at least half the remaining Partners to wind up; or
(ii) The expiration of the term or completion of the undertaking;

(c) An event agreed to in the Agreement as causing dissolution;

(d) An event that makes it unlawful to carry on the business (unless cured within 90 days);

(e) Judicial determination under SDCL Section 48-7A-801(5); or

(f) Unanimous written agreement of all Partners.

12.5 Buyout of Dissociated Partner's Interest.

(a) If the Partnership continues after dissociation, the Partnership shall purchase the dissociated Partner's interest for the buyout price, pursuant to SDCL Section 48-7A-701.

(b) The buyout price equals the amount that would have been distributable to the dissociated Partner under SDCL Section 48-7A-807(b) if, on the date of dissociation, the assets of the Partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern, plus interest from the date of dissociation.

(c) Payment shall be made within [____] days of valuation or in [____] equal monthly installments with interest at [____]% per annum.

12.6 Winding Up.

(a) Upon dissolution, the Partnership shall be wound up by the Partners who have not wrongfully dissociated, or by a court-appointed person under SDCL Section 48-7A-803.

(b) During winding up, the Partnership shall:
(i) Collect all amounts owing to the Partnership;
(ii) Pay all Partnership debts and obligations;
(iii) Liquidate assets at reasonable prices;
(iv) Distribute remaining assets in accordance with Section 12.6(c); and
(v) File a Statement of Dissolution with the Secretary of State pursuant to SDCL Section 48-7A-805.

(c) Order of Distribution (per SDCL Section 48-7A-807):
(i) First, to creditors (including Partners who are creditors) in satisfaction of Partnership liabilities;
(ii) Second, to Partners and former Partners in satisfaction of distributions owed under SDCL Section 48-7A-401; and
(iii) Third, to Partners in proportion to positive Capital Account balances.

12.7 Statement of Dissolution. After dissolution, a Partner who has not wrongfully dissociated may file a Statement of Dissolution with the Secretary of State under SDCL Section 48-7A-805. A filed Statement of Dissolution cancels any filed Statement of Partnership Authority. A person not a partner is deemed to have notice of dissolution ninety (90) days after the Statement of Dissolution is filed.

ARTICLE 13: DEFAULT AND REMEDIES

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

(a) Materially breaches this Agreement and fails to cure within thirty (30) days of written notice;
(b) Becomes insolvent or files for bankruptcy;
(c) Engages in fraud, embezzlement, or criminal conduct relating to the Partnership;
(d) Willfully violates fiduciary duties under the Act;
(e) Fails to make a required Capital Contribution within the prescribed time; or
(f) Breaches non-competition, non-solicitation, or confidentiality covenants.

13.2 Remedies. Non-defaulting Partners may:

(a) Suspend the Defaulting Partner's voting and management rights;
(b) Purchase the Defaulting Partner's interest at the lesser of fair market value or book value;
(c) Offset damages against amounts due to the Defaulting Partner;
(d) Seek specific performance or injunctive relief;
(e) Expel the Defaulting Partner by unanimous vote of non-defaulting Partners; or
(f) Dissolve the Partnership.

13.3 Cumulative Remedies. All remedies are cumulative and in addition to remedies at law or equity.

13.4 Attorneys' Fees. The prevailing party in any enforcement action is entitled to reasonable attorneys' fees and costs.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Negotiation. The Partners shall first attempt good faith negotiation of any Dispute.

14.2 Mediation. If not resolved within thirty (30) days, the Dispute shall be submitted to mediation in [________________________________] County, South Dakota.

14.3 Arbitration or Litigation.

☐ Option A: Arbitration. Disputes not resolved through mediation shall be submitted to binding arbitration under AAA Commercial Arbitration Rules. The seat of arbitration shall be [________________________________], South Dakota. One arbitrator with at least ten (10) years' partnership or commercial dispute experience shall be appointed.

☐ Option B: Litigation. Disputes shall be resolved in the state or federal courts located in [________________________________] County, South Dakota.

14.4 Injunctive Relief. Any Partner may seek injunctive relief or specific performance in the state or federal courts in [________________________________] County, South Dakota.

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

14.6 Confidentiality. All dispute resolution proceedings shall be confidential.

14.7 Governing Law. Disputes shall be governed by South Dakota law.

ARTICLE 15: GENERAL PROVISIONS

15.1 Governing Law. This Agreement shall be governed by the laws of the State of South Dakota, including the South Dakota Uniform Partnership Act (SDCL Chapter 48-7A), without regard to conflict of laws principles.

15.2 Amendments. This Agreement may be amended only by written instrument signed by all Partners.

15.3 Waiver. No failure or delay in exercising any right operates as a waiver.

15.4 Entire Agreement. This Agreement and all Schedules constitute the entire agreement among the Partners and supersede all prior agreements.

15.5 Severability. Invalid provisions shall be reformed to the minimum extent necessary; remaining provisions remain in full force.

15.6 Successors and Assigns. This Agreement binds and benefits the Partners and their heirs, executors, administrators, successors, and permitted assigns.

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

(a) Personal delivery;
(b) One (1) business day after overnight courier deposit;
(c) Confirmed email; or
(d) Three (3) business days after first-class mail deposit, postage prepaid, return receipt requested;

addressed to the Partner at the address on Schedule A.

15.8 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts. Electronic signatures are binding.

15.9 Interpretation. Headings are for convenience only. "Including" means "including without limitation." The singular includes the plural.

15.10 Force Majeure. No Partner is liable for failure to perform (except payment obligations) caused by events beyond reasonable control, including acts of God, natural disasters, epidemics, pandemics, war, governmental actions, or utility failures ("Force Majeure Event"), provided prompt notice and mitigation efforts.

15.11 No Third-Party Beneficiaries. Nothing herein confers rights upon any Person other than the Partners.

15.12 Further Assurances. Each Partner shall execute additional documents as reasonably necessary to carry out this Agreement.

ARTICLE 16: SOUTH DAKOTA-SPECIFIC PROVISIONS

16.1 Governing Statute. This Partnership is governed by the South Dakota Uniform Partnership Act, SDCL Chapter 48-7A, which is based on the Revised Uniform Partnership Act (RUPA). South Dakota adopted RUPA, which treats the partnership as a separate legal entity (SDCL Section 48-7A-201), unlike the original UPA's aggregate theory.

16.2 No State Formation Filing Required. South Dakota does not require the filing of any formation document with the Secretary of State to form a general partnership. The Partnership is formed by the association of the Partners as co-owners of a business for profit. No annual report filing is required for a general partnership (as distinguished from LLPs, LPs, and LLCs which do have reporting obligations).

16.3 Statement of Partnership Authority.

(a) The Partnership may (but is not required to) file a Statement of Partnership Authority with the South Dakota Secretary of State pursuant to SDCL Section 48-7A-303.

(b) A Statement of Partnership Authority must include:
(i) The name of the Partnership;
(ii) The street address of its chief executive office and of one office in South Dakota (if any);
(iii) The names and mailing addresses of all Partners (or of an agent appointed to maintain the list); and
(iv) The names of the Partners authorized to execute instruments transferring real property.

(c) A filed Statement of Partnership Authority is effective for five (5) years after filing, unless canceled earlier (SDCL Section 48-7A-303(f)).

(d) A grant of authority to transfer real property held in the name of the Partnership contained in a Statement of Partnership Authority is conclusive in favor of a person who gives value without knowledge to the contrary if a certified copy of the Statement is recorded in the office of the Register of Deeds in the county where the real property is located.

(e) The Partners elect:

☐ To file a Statement of Partnership Authority
☐ Not to file a Statement of Partnership Authority at this time

16.4 No State Income Tax -- Tax Advantages.

(a) South Dakota imposes no state individual income tax (South Dakota Constitution, Article XI, Section 15, prohibits a personal income tax). This means that Partners who are South Dakota residents pay no state income tax on their distributive share of Partnership income.

(b) South Dakota imposes no state corporate income tax. Partnership income that flows through to a corporate Partner that is a South Dakota entity is not subject to state corporate income tax.

(c) Federal Tax Obligations Remain. All Partners remain subject to federal income taxation on their distributive share of Partnership income. The Partnership must file IRS Form 1065 and issue Schedules K-1 to all Partners.

(d) Multi-State Operations. If the Partnership conducts business in states that impose income tax, Partners may be subject to income tax in those states. The Partnership shall comply with all applicable filing and withholding requirements in those jurisdictions.

(e) South Dakota Sales Tax. South Dakota does impose a sales and use tax (currently 4.5% state rate, plus applicable municipal tax). If the Partnership sells tangible personal property or taxable services, it must register for a sales tax license with the South Dakota Department of Revenue and collect and remit applicable sales tax.

16.5 South Dakota Trust-Friendly Provisions.

(a) South Dakota is recognized as a leading trust-friendly jurisdiction. If any Partner holds its Partnership Interest through a South Dakota trust, the following advantages may apply:

(i) No state income tax on trust income;
(ii) South Dakota permits perpetual (dynasty) trusts;
(iii) South Dakota has strong asset protection trust statutes (SDCL Chapter 55-16); and
(iv) South Dakota has favorable decanting statutes allowing trust modification.

(b) Partners holding interests through trusts should ensure that the trust instrument permits the trust to hold partnership interests and that the trustee has authority to execute this Agreement.

16.6 Filing Fees and Agency Information.

South Dakota Secretary of State
500 East Capitol Avenue
Pierre, SD 57501
Telephone: (605) 773-4845
Website: www.sdsos.gov

South Dakota Department of Revenue
445 East Capitol Avenue
Pierre, SD 57501
Telephone: (605) 773-3311
Website: www.dor.sd.gov

16.7 LLP Conversion Option. The Partners may elect to convert the Partnership to a limited liability partnership by filing a Statement of Qualification with the Secretary of State pursuant to SDCL Section 48-7A-1001. LLP registration:

(a) Must include the name of the Partnership (which must contain "Registered Limited Liability Partnership," "Limited Liability Partnership," "R.L.L.P.," "L.L.P.," "RLLP," or "LLP");
(b) Must include the street address of the chief executive office;
(c) Provides a liability shield for Partners against obligations arising from the negligence, wrongful acts, or misconduct of other Partners (SDCL Section 48-7A-306(c)); and
(d) Requires ongoing annual reporting with the Secretary of State.

16.8 Real Property Provisions.

(a) Under SDCL Section 48-7A-204, Partnership property may be held in the name of the Partnership.

(b) A Partner may transfer real property held in the Partnership name without the other Partners' consent if the Statement of Partnership Authority grants such authority and a certified copy is recorded with the Register of Deeds in the county where the property is located.

(c) Real property titled in the Partnership name may be conveyed by an instrument of transfer executed by a Partner in the Partnership name.

(d) A grant of authority for real property transfers in a filed and recorded Statement of Partnership Authority is conclusive in favor of third parties acting in good faith without knowledge to the contrary (SDCL Section 48-7A-303(d)).

16.9 Merger and Conversion.

(a) Under SDCL Section 48-7A-901 et seq., the Partnership may merge with one or more partnerships or limited partnerships.

(b) A plan of merger must be approved by all Partners.

(c) A Statement of Merger must be filed with the Secretary of State.

16.10 Statute of Limitations. Partners should be aware of applicable South Dakota statutes of limitations, including:

(a) Contract actions: six (6) years (SDCL Section 15-2-13);
(b) Fraud: six (6) years from discovery (SDCL Section 15-2-13); and
(c) Actions against dissociated Partners: two (2) years from dissociation (SDCL Section 48-7A-702(b)).

ARTICLE 17: EXECUTION AND SIGNATURE BLOCKS

IN WITNESS WHEREOF, the undersigned Partners have executed this General Partnership Agreement as of the Effective Date first written above, intending to be legally bound hereby.

PARTNER SIGNATURES

Partner A:

Signature: _______________________________________________

Printed Name: [________________________________]

Title (if entity): [________________________________]

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner B:

Signature: _______________________________________________

Printed Name: [________________________________]

Title (if entity): [________________________________]

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

Partner C (if applicable):

Signature: _______________________________________________

Printed Name: [________________________________]

Title (if entity): [________________________________]

Date: [__/__/____]

Address: [________________________________]
[________________________________]
[________________________________]

Email: [________________________________]

NOTARY ACKNOWLEDGMENT

STATE OF SOUTH DAKOTA
COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned Notary Public, personally appeared:

☐ [________________________________], known to me (or proved on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he/she/they executed the same in his/her/their authorized capacity(ies).

☐ [________________________________], known to me (or proved on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged that he/she/they executed the same in his/her/their authorized capacity(ies).

WITNESS my hand and official seal.

Notary Public Signature: _______________________________________________

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARY SEAL]

SCHEDULE A: PARTNERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

Description of Non-Cash Contributions (if any):

Partner [____]: [________________________________]
Agreed Fair Market Value: $[________________________________]
Basis for Valuation: [________________________________]

SCHEDULE B: STATE-SPECIFIC PARTNERSHIP LAW RIDER

B.1 South Dakota Partnership Type Classification:

☐ Partnership at will (no definite term or particular undertaking)
☐ Partnership for a definite term of [________________________________] years
☐ Partnership for a particular undertaking: [________________________________]

B.2 Statement of Partnership Authority:

☐ Filed with the SD Secretary of State on [__/__/____]
☐ Not filed

B.3 Real Property Authority. The following Partners are authorized to execute instruments transferring real property:

☐ [________________________________]
☐ [________________________________]

B.4 Assumed Business Name Registration:

☐ Filed with [________________________________] County Register of Deeds on [__/__/____]
☐ Not applicable

B.5 Sales Tax License (if applicable):

☐ Obtained -- License No.: [________________________________]
☐ Not applicable

SCHEDULE C: FORM OF JOINDER AGREEMENT

JOINDER TO GENERAL PARTNERSHIP AGREEMENT

The undersigned ("New Partner") hereby agrees to be bound by all terms of that certain General Partnership Agreement dated [__/__/____], as amended, among the Partners of [________________________________] (the "Partnership").

Capital Contribution: $[________________________________]
Percentage Interest: [____]%
Form of Contribution: ☐ Cash ☐ Property ☐ Services
Effective Date of Admission: [__/__/____]

New Partner:

Signature: _______________________________________________

Printed Name: [________________________________]

Date: [__/__/____]

Acknowledged by Existing Partners:

Partner A Signature: _______________________________________________ Date: [__/__/____]

Partner B Signature: _______________________________________________ Date: [__/__/____]

SCHEDULE D: PARTNERSHIP PROPERTY (INITIAL)

DISCLAIMER: This template is provided for informational purposes only and does not constitute legal advice. This document should be reviewed, customized, and approved by a qualified attorney licensed in South Dakota before execution. The use of this template does not create an attorney-client relationship. Laws change frequently, and this template may not reflect the most current statutory requirements. Do not rely on this template without independent legal review.

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