Partnership Agreement - General (Virginia)

GENERAL PARTNERSHIP AGREEMENT

COMMONWEALTH OF VIRGINIA

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 [________________________________], Virginia / a [________________________________] (entity type) organized under the laws of [____]

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

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

The Partners agree to carry on the business described below as co-owners for profit and to govern their relationship under this Agreement and the Virginia Uniform Partnership Act, Va. Code Ann. Section 50-73.79 et seq. (the "Act"). Their general partnership is referred to as the "Partnership."

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;

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

D. The Partners intend that this Partnership shall be governed by the Virginia Uniform Partnership Act (Va. Code Ann. Section 50-73.79 et seq., Chapter 2.2 of Title 50), which is Virginia's adoption of the Revised Uniform Partnership Act (RUPA);

E. The Partners acknowledge that the Virginia State Corporation Commission (the "Commission" or "SCC") serves as the filing authority for business entity documents in Virginia;

F. The Partners acknowledge that the Partnership may optionally file a Statement of Partnership Authority with the SCC, which is particularly important if the Partnership will hold or transfer real property in Virginia; and

G. The Partners have had the opportunity to seek independent legal and tax counsel.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, 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. Virginia-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 Virginia Uniform Partnership Act, Va. Code Ann. Section 50-73.79 et seq. (Chapter 2.2 of Title 50), as amended.

"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.

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

"Capital Account" means each Partner's account maintained per Treasury Regulations Section 1.704-1(b)(2)(iv).

"Capital Contribution" means the total cash and agreed fair market value of property (net of liabilities) contributed by a Partner, as on Schedule A.

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

"Commission" or "SCC" means the Virginia State Corporation Commission.

"Commonwealth" means the Commonwealth of Virginia.

"Defaulting Partner" has the meaning in Section 13.1.

"Dissociation" has the meaning in Va. Code Ann. Section 50-73.109 and Section 12.1.

"Effective Date" has the meaning in the preamble.

"Fiscal Year" has the meaning in Section 8.1.

"Force Majeure Event" has the meaning in Section 15.10.

"Form UPA-93" means the Statement of Partnership Authority form prescribed by the Virginia State Corporation Commission.

"Losses" has the meaning in Section 10.1.

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

"Net Cash Flow" means gross cash receipts less cash expenditures, debt service, and reasonable reserves.

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

"Partnership" has the meaning in the preamble.

"Partnership Interest" means a Partner's entire interest, including distribution, allocation, and management rights.

"Partnership Representative" has the meaning in Section 4.5.

"Percentage Interest" means the percentage on Schedule A.

"Person" means any individual, corporation, partnership, LLC, trust, estate, association, or other entity.

"Profits" and "Losses" mean the Partnership's taxable income or loss per Code Section 703(a), with adjustments.

"Property" means all property, real, personal, or mixed, tangible or intangible, or any interest therein, as defined in Va. Code Ann. Section 50-73.79.

"Statement" means a statement of partnership authority under Va. Code Ann. Section 50-73.93, a statement of denial under Va. Code Ann. Section 50-73.94, a statement of dissociation under Va. Code Ann. Section 50-73.115, a statement of dissolution under Va. Code Ann. Section 50-73.121, or a statement of merger under Va. Code Ann. Section 50-73.126:3.

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

"Transfer" has the meaning in Section 11.1.

"Transferable Interest" means a Partner's share of profits and losses and right to receive distributions, as defined in Va. Code Ann. Section 50-73.79.

"Treasury Regulations" means federal income tax regulations under the Code.

ARTICLE 2: FORMATION; NAME; PURPOSE; TERM

2.1 Partnership Relationship. The Effective Date begins this Agreement among the Partners. Under Va. Code § 50-73.88(A), a general partnership forms when two or more persons associate to carry on a business for profit as co-owners, whether or not they intend to form one. This Agreement date alone does not establish when that association began. The Partners will record when their business association began: [__/__/____]. Under Va. Code Ann. Section 50-73.87, a partnership is an entity distinct from its partners. No filing with the Virginia State Corporation Commission is required to form a general partnership, although the Partnership may optionally file a Statement of Partnership Authority.

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

[________________________________]

or such other name as unanimously approved. If the Partnership operates under an assumed or fictitious name, it shall comply with Virginia's fictitious name statute (Va. Code Ann. Section 59.1-69 et seq.) and file a fictitious name certificate with the clerk of the circuit court in each locality where the Partnership conducts business.

2.3 Purpose. The purpose of the Partnership is to:

[________________________________]
[________________________________]

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

2.4 Principal Office. The principal office shall be at:

[________________________________]
[________________________________]
[________________________________], Virginia [____]

or at such other location as determined by Majority Interest vote.

2.5 Registered Agent. If the Partnership files a Statement of Partnership Authority or registers as an LLP with the SCC, the registered agent shall be:

Registered Agent: [________________________________]
Registered Office Address: [________________________________], Virginia [____]

If the Partnership registers as an LLP, its registered agent and office must meet Va. Code Ann. Section 50-73.135. An individual agent must be a Virginia resident who meets one of the listed partner, entity-officer, or Virginia State Bar qualifications, with a business office identical to the registered office. A qualifying authorized entity may serve subject to that section's conditions. An ordinary general partnership filing only a Statement of Partnership Authority need not appoint a registered agent under this LLP provision.

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

☐ In perpetuity, until dissolved under Article 12; or
☐ For a definite term of [________________________________] years; or
☐ Until completion of the following particular undertaking: [________________________________]

2.7 Entity Status. Under Va. Code Ann. Section 50-73.87, a partnership is an entity distinct from its partners. The Partnership may own property, sue and be sued, and transact business in its own name.

ARTICLE 3: CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions. Each Partner shall contribute the Capital Contribution on Schedule A on or before the Effective Date. Contributions may be cash, property, or services.

3.2 Additional Contributions.

(a) No additional contributions required without written consent.

(b) Pro rata additional contributions may be requested by Majority Interest.

(c) Percentage Interests adjusted for disproportionate contributions.

(d) Failure to contribute within [____] days constitutes Default.

3.3 Capital Accounts. Maintained per Treasury Regulations Section 1.704-1(b)(2)(iv), increased by contributions and Profit allocations, decreased by distributions and Loss allocations.

3.4 No Interest on Capital. No interest on Capital Contributions unless unanimously agreed.

3.5 Withdrawal of Capital. No withdrawal without consent, except upon dissolution.

3.6 Loans by Partners. Partner loans require Majority Interest consent, bear interest at [____]% per annum, and are repaid before distributions.

3.7 Return of Capital. No right to demand return except upon dissolution. Under Va. Code Ann. Section 50-73.99(H), a Partner is not entitled to remuneration for services except reasonable compensation for winding up.

ARTICLE 4: ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS

4.1 Allocations of Profits and Losses.

(a) General Rule. Allocated in proportion to Percentage Interests.

(b) Substantial Economic Effect. Allocations satisfy Treasury Regulations Section 1.704-1(b).

(c) Capital Account Adjustments. Per Treasury Regulations Section 1.704-1(b)(2)(iv).

(d) Regulatory Allocations:
(i) Minimum Gain Chargeback per Treasury Regulations Section 1.704-2(f);
(ii) Qualified Income Offset per Treasury Regulations Section 1.704-1(b)(2)(ii)(d);
(iii) Nonrecourse Deductions allocated per Percentage Interests.

4.2 Distributions.

(a) Net Cash Flow distributed at times and amounts determined by Majority Interest, no less than [quarterly / annually].

(b) Distributions pro rata per Percentage Interests.

(c) No distribution rendering the Partnership unable to pay debts as they become due.

(d) Tax Distributions. The Partnership shall distribute amounts estimated to cover each Partner's federal and Virginia state income tax liability.

4.3 Withholding. The Partnership shall withhold amounts required under federal and Virginia tax laws, including Virginia withholding on nonresident partners under Va. Code § 58.1-486.2.

4.4 Tax Elections.

☐ Section 754 election
☐ [Cash / Accrual] method
☐ Other elections as deemed appropriate

4.5 Partnership Representative. [________________________________] is designated as Partnership Representative under Code Section 6223. The Partnership Representative shall:

(a) Act on behalf of the Partnership in federal tax proceedings;
(b) Keep Partners informed;
(c) Pursue push-out elections under Code Section 6226 when available; and
(d) Be removable by Majority Interest vote.

4.6 Tax Returns. The Partnership shall file:

(a) IRS Form 1065;
(b) Virginia Form 502 (Pass-Through Entity Return of Income and Return of Nonresident Withholding Tax);
(c) Virginia Schedule VK-1 to each Partner; and
(d) Schedule K-1 to each Partner no later than March 15 annually.

4.7 Virginia Pass-Through Entity Tax Election. Pursuant to Va. Code Ann. Section 58.1-390.3(A)(2), the Partnership may make an annual election on its timely filed return for taxable years beginning on or after January 1, 2022, to pay Virginia income tax at the entity level (Pass-Through Entity Tax or "PTET"). This election:

(a) Requires affirmative election by the Partnership;
(b) Allows Partners to claim a credit on their individual Virginia returns;
(c) May provide benefits related to the federal limitation on state and local tax deductions; and
(d) Requires careful analysis by a qualified tax advisor.

☐ The Partnership elects to make the Virginia PTET election
☐ The Partnership does not elect the PTET at this time
☐ To be determined upon consultation with tax advisor

ARTICLE 5: MANAGEMENT; VOTING; MEETINGS

5.1 Management.

☐ Option A: Partner-Managed. All Partners collectively manage.

☐ Option B: Managing Partner. [________________________________] (the "Managing Partner") manages day-to-day operations.

5.2 Authority of Partners. Under Va. Code Ann. Section 50-73.91, 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's business binds the Partnership, unless the Partner had no authority and the third party knew or had received notification of the Partner's lack of authority.

5.3 Ordinary Decisions. This Agreement requires a Majority Interest vote. The statutory default under Va. Code Ann. Section 50-73.99(J) permits a majority of the Partners to decide differences in the ordinary course.

5.4 Major Decisions. Require unanimous written consent:

(a) Amendment of this Agreement;
(b) Admission of a new Partner;
(c) Sale of all or substantially all assets;
(d) Merger or conversion;
(e) Voluntary dissolution;
(f) Contracts exceeding $[________________________________];
(g) Indebtedness exceeding $[________________________________];
(h) Filing a Statement of Partnership Authority with the SCC;
(i) Conversion to LLP or other entity;
(j) Acquisition or disposition of real property;
(k) Litigation involving claims exceeding $[________________________________];
(l) Change in purpose; and
(m) Acts outside the ordinary course (per Va. Code Ann. Section 50-73.99(J)).

5.5 Meetings.

(a) Regular meetings at least [quarterly / annually].
(b) Special meetings on five (5) business days' written notice.
(c) Electronic participation permitted.

5.6 Quorum. Majority Interest constitutes a quorum.

5.7 Action Without Meeting. Permitted by written consent of the requisite voting interest.

5.8 Minutes. Written minutes maintained.

5.9 Officers and Agents. Appointed by Majority Interest vote.

ARTICLE 6: REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants as of the Effective Date:

6.1 Authority. Full legal right, power, and authority to execute and perform this Agreement.

6.2 Enforceability. This Agreement is a valid and binding obligation.

6.3 No Conflict. No violation of applicable law, agreement, or instrument.

6.4 No Litigation. No pending or threatened litigation materially affecting performance.

6.5 Investment Purpose. Partnership Interest acquired for investment.

6.6 Sophistication. Experienced in business; opportunity to consult advisors.

6.7 Virginia Tax Acknowledgment. Acknowledges Virginia's tax obligations, including the Virginia individual income tax and pass-through entity reporting requirements.

6.8 Real Property Disclosure. If the Partnership will hold real property in Virginia, each Partner acknowledges the importance of filing a Statement of Partnership Authority with the SCC and recording it in the applicable circuit court clerk's office to provide constructive notice of authority.

6.9 Survival. Representations 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 with all applicable laws, including the Act and Virginia tax requirements.

7.2 Non-Competition.

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

(b) The Partners shall keep this restriction narrowly tailored to protect a legitimate Partnership interest, with a reasonable scope of activity, geography, and duration. An overbroad covenant may be unenforceable in its entirety; the Partners shall not assume that a court will trim or rewrite it. See Home Paramount Pest Control Cos. v. Shaffer, 282 Va. 412 (2011) (employment covenant held unenforceable for overbreadth).

(c) Passive ownership of less than 5% of publicly traded securities is not prohibited.

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

7.4 Confidentiality.

(a) Confidential Information shall be maintained.
(b) Survives [____] years after termination.
(c) Virginia's Uniform Trade Secrets Act (Va. Code Ann. Section 59.1-336 et seq.) provides additional protections for trade secrets.

7.5 Duty of Loyalty. Under Va. Code Ann. Section 50-73.102(b), each Partner's duty of loyalty includes:

(a) Accounting for profits derived from Partnership business or use of Partnership property, including appropriation of a Partnership opportunity;
(b) Refraining from dealing as or on behalf of an adverse party; and
(c) Refraining from competing with the Partnership.

7.6 Duty of Care. Under Va. Code Ann. Section 50-73.102(c), the duty of care is limited to refraining from grossly negligent or reckless conduct, intentional misconduct, or knowing violation of law.

7.7 Good Faith and Fair Dealing. Under Va. Code Ann. Section 50-73.102(d).

7.8 Notice of Material Events. Prompt notification of breaches, adverse changes, litigation, or dissolution events.

ARTICLE 8: BOOKS, RECORDS, AND ACCOUNTING

8.1 Fiscal Year. Ends on [________________________________].

8.2 Method of Accounting. [Cash / Accrual] method, GAAP consistently applied.

8.3 Books and Records. Maintained at the principal office:

(a) Current Partner list with addresses and Percentage Interests;
(b) Tax returns for current and prior three (3) years;
(c) This Agreement and amendments;
(d) Financial statements for current and prior three (3) years;
(e) Capital account records;
(f) Meeting minutes; and
(g) All records required by the Act.

8.4 Inspection Rights. Under Va. Code Ann. Section 50-73.101(B), each Partner and the Partner's agent or attorney may inspect and copy the Partnership's books and records during ordinary business hours. The Partnership shall provide former Partners and their agents and attorneys access to books and records pertaining to the period during which they were Partners.

8.5 Financial Reports.

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

8.6 Bank Accounts. Partnership funds in accounts in the Partnership name. Withdrawals require signature of [________________________________].

8.7 Independent Auditor. May be engaged by Majority Interest vote.

ARTICLE 9: INSURANCE AND RISK MANAGEMENT

9.1 Required Insurance.

(a) Commercial General Liability -- $[________________________________] per occurrence / $[________________________________] aggregate;
(b) Property Insurance -- replacement cost;
(c) Professional Liability (if applicable) -- $[________________________________] per claim;
(d) Workers' Compensation as required by Virginia law (Va. Code Ann. Section 65.2-101; the exemption for employers with fewer than three employees does not apply to underground coal mine operators or their employees); and
(e) Other insurance as deemed appropriate.

9.2 Additional Insureds. Partners named as additional insureds where feasible.

9.3 Annual Review. Insurance reviewed at least annually.

9.4 Risk Management. Appropriate policies and procedures maintained.

ARTICLE 10: INDEMNIFICATION; LIMITATION OF LIABILITY

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

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

10.2 Partnership Indemnification. Under Va. Code Ann. Section 50-73.99(C), the Partnership shall reimburse a Partner for payments made and indemnify a Partner for liabilities incurred in the ordinary course of Partnership business, subject to the limitation stated there.

10.3 Advance of Expenses. The Partnership may advance defense expenses, subject to repayment.

10.4 Limitation of Liability.

(a) As between the Partners and the Partnership, no Partner is liable for monetary damages for an ordinary good-faith error in judgment. This limitation does not cover breach of loyalty, grossly negligent or reckless conduct, fraud, intentional misconduct, a knowing violation of law, or improper personal benefit.

(b) Aggregate liability:
☐ Unlimited (default under Virginia general partnership law)
☐ $[________________________________] (inter-partner cap; does not affect third-party liability or the conduct excluded in subsection (a))

10.5 Third-Party Liability. Under Va. Code Ann. Section 50-73.96, Partners are generally jointly and severally liable for Partnership obligations, subject to the statutory exceptions. Under Va. Code Ann. Section 50-73.97(C)-(D), a Partnership judgment alone cannot be satisfied from a Partner's assets: the creditor also needs a judgment against that Partner. Levy on a Partner's assets for a Partnership claim further requires a statutory ground: an unsatisfied execution against the Partnership, Partnership bankruptcy, the Partner's agreement to dispense with exhaustion, court permission under § 50-73.97(D)(1)(d), or liability imposed independently on that Partner under § 50-73.97(D)(2).

10.6 Exculpation. A Partner is not liable under this Agreement for an ordinary good-faith error in judgment within the scope of authority, subject to the exceptions in Section 10.4(a).

ARTICLE 11: TRANSFER OF INTERESTS; ADMISSION; WITHDRAWAL

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

(a) Compliance with securities laws;
(b) Prior written consent of Partners holding at least [____]% of non-transferring interests; and
(c) Transferee's execution of a joinder.

11.2 Transferable Interest. Under Va. Code Ann. § 50-73.106, the only transferable interest is the Partner's share of profits and losses and right to distributions. Transfer of only the economic interest does not transfer management rights.

11.3 Right of First Refusal.

(a) A Partner receiving a bona fide offer must first offer the interest to remaining Partners.
(b) [____] day exercise period.
(c) If not exercised, transfer may proceed on no better terms.

11.4 Permitted Transfers. Without consent to revocable trusts, family members, or wholly owned entities, provided the transferee agrees to be bound.

11.5 Admission of New Partners. Unanimous consent, joinder, and Schedule A amendment required.

11.6 Withdrawal.

(a) Ninety (90) days' prior written notice.

(b) Under Va. Code Ann. Section 50-73.110, a Partner has the power to dissociate at any time by express will, but dissociation may be wrongful under subsection B of that section.

(c) Wrongful dissociation subjects the Partner to liability for damages.

ARTICLE 12: DISSOCIATION; DISSOLUTION; WINDING UP

12.1 Events of Dissociation. Under Va. Code Ann. Section 50-73.109, a Partner is dissociated upon:

(a) Notice of express will to withdraw;
(b) An event specified in this Agreement;
(c) Expulsion under this Agreement;
(d) Expulsion by unanimous vote of the other Partners if it is unlawful to carry on business with that Partner, or all or substantially all of that Partner's transferable interest has been transferred, subject to the exceptions in § 50-73.109(4);
(e) Judicial expulsion under § 50-73.109(5), including business-related conduct making continued partnership with that Partner not reasonably practicable;
(f) Bankruptcy or another creditor-related event under § 50-73.109(6);
(g) Death, appointment of a guardian, committee, or conservator, or judicial incapacity determination for an individual Partner;
(h) Distribution of the entire transferable interest of a trust or estate Partner under § 50-73.109(8)-(9);
(i) Termination of a Partner entity other than an individual, partnership, corporation, LLC, trust, or estate under § 50-73.109(10);
(j) Expiration of 90 days after the Partnership notifies a corporate Partner of expulsion for dissolution, termination, charter revocation, or suspension, if the corporate status is not restored as § 50-73.109(11) provides; or
(k) Dissolution and winding up of a Partner that is a partnership or LLC under § 50-73.109(12).

12.2 Effect of Dissociation.

(a) Management and voting rights terminate;
(b) Duties of loyalty and care end except for pre-dissociation matters;
(c) Under Va. Code Ann. Section 50-73.113, certain acts of a dissociated Partner may bind the Partnership for one (1) year after dissociation if the statutory conditions are met; and
(d) If the Partnership continues, buyout provisions apply.

12.3 Statement of Dissociation. The Partnership may file a Statement of Dissociation with the SCC under Va. Code Ann. Section 50-73.115. A filed Statement limits the dissociated Partner's authority ninety (90) days after filing.

12.4 Dissolution Events. Under Va. Code Ann. Section 50-73.117, the Partnership dissolves upon:

(a) Partnership at will: Notice of a Partner's express will to withdraw, effective on a later date specified in the notice or, if none, on the notice date. After dissolution and before winding up is complete, all Partners entitled to do so may waive winding up under Va. Code Ann. Section 50-73.118(B);

(b) Definite term/undertaking: Within 90 days after a Partner's death, Bankruptcy, wrongful dissociation, or judicial expulsion, the express will of at least half the remaining Partners to wind up; or expiration of the term;

(c) Event specified in this Agreement;

(d) Event making it unlawful to carry on business (unless cured within 90 days);

(e) Judicial dissolution upon application by a Partner under Va. Code Ann. Section 50-73.117(5); or

(f) Unanimous written agreement.

12.5 Buyout of Dissociated Partner's Interest.

(a) Under Va. Code Ann. Section 50-73.112, if dissociation does not result in dissolution and winding up, the Partnership shall cause the dissociated Partner's interest to be purchased.

(b) The buyout price equals the amount distributable if Partnership assets were sold at the greater of liquidation value or going-concern value, plus interest from the date of dissociation at the legal rate.

(c) Payment within [____] days of valuation or in [____] monthly installments at [____]% interest.

12.6 Winding Up.

(a) Upon dissolution, Partners who have not wrongfully dissociated shall wind up, or a court-appointed person under Va. Code Ann. Section 50-73.119.

(b) During winding up:
(i) Collect amounts owed;
(ii) Pay debts and obligations;
(iii) Liquidate assets;
(iv) Distribute remaining assets per Section 12.6(c); and
(v) File a Statement of Dissolution with the SCC under Va. Code Ann. Section 50-73.121.

(c) Settlement of Accounts (Va. Code Ann. Section 50-73.123):
(i) Apply Partnership assets, including required Partner contributions, to creditor obligations, including Partner-creditors to the extent permitted by law;
(ii) Credit or charge liquidation gains and losses to Partner accounts; and
(iii) Distribute account surpluses to Partners and obtain contributions for account deficits attributable to obligations for which a Partner is liable under Va. Code Ann. Section 50-73.96.

12.7 Statement of Dissolution. Filed with the SCC under Va. Code Ann. Section 50-73.121, canceling any filed Statement of Partnership Authority. Constructive notice ninety (90) days after filing.

12.8 LLP Registration Cancellation. If the Partnership is registered as an LLP, the Partners may cancel that registration by filing a statement of cancellation of registration with the SCC under Va. Code Ann. § 50-73.137, with the consent required by that section. The filing cancels the LLP registration; by itself it does not dissolve the Partnership. LLP registration begins with a statement of registration under § 50-73.132.

ARTICLE 13: DEFAULT AND REMEDIES

13.1 Events of Default. A "Default" occurs if any Partner:

(a) Materially breaches this Agreement and fails to cure within thirty (30) days of notice;
(b) Becomes insolvent or files for bankruptcy;
(c) Engages in fraud, embezzlement, or criminal conduct;
(d) Willfully violates fiduciary duties;
(e) Fails to make required Capital Contributions; or
(f) Breaches restrictive covenants.

13.2 Remedies. Non-defaulting Partners may:

(a) Suspend the Defaulting Partner's rights;
(b) Purchase the interest at the lesser of fair market or book value;
(c) Offset damages;
(d) Seek specific performance or injunctive relief;
(e) Expel the Defaulting Partner; or
(f) Dissolve the Partnership.

13.3 Cumulative Remedies. All remedies are cumulative.

13.4 Attorneys' Fees. Virginia follows the "American Rule" -- each party bears its own attorneys' fees absent a contractual or statutory provision. Accordingly, the Partners agree that in any action to enforce this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs from the non-prevailing party, as a contractual exception to the American Rule.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Negotiation. Good faith negotiation first.

14.2 Mediation. If unresolved within thirty (30) days, mediation in [________________________________], Virginia.

14.3 Arbitration or Litigation.

☐ Option A: Arbitration. Binding arbitration under AAA Commercial Arbitration Rules in [________________________________], Virginia. One arbitrator with ten (10) years' experience.

☐ Option B: Litigation. State courts of the Commonwealth of Virginia sitting in [________________________________] or the United States District Court for the [Eastern / Western] District of Virginia.

14.4 Injunctive Relief. Available in the circuit court of [________________________________], Virginia, or the applicable United States District Court.

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 proceedings confidential.

14.7 Governing Law for Disputes. Virginia law applies.

ARTICLE 15: GENERAL PROVISIONS

15.1 Governing Law. This Agreement is governed by the laws of the Commonwealth of Virginia, including the Virginia Uniform Partnership Act (Va. Code Ann. Section 50-73.79 et seq.), without regard to conflict of laws principles.

15.2 Amendments. Written instrument signed by all Partners required.

15.3 Waiver. No waiver by delay.

15.4 Entire Agreement. This Agreement and Schedules constitute the entire agreement.

15.5 Severability. If a provision is held invalid, the Parties intend the remaining independent provisions to continue in effect. This clause does not authorize a court to rewrite an overbroad noncompetition covenant; see Article 7.2(b).

15.6 Successors and Assigns. Binding on heirs, executors, successors, and permitted assigns.

15.7 Notices. Written notices deemed given upon:

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

15.8 Counterparts; Electronic Signatures. The Partners may sign counterparts. Electronic signatures may be used if each Partner separately agrees to transact electronically; a signature cannot be denied legal effect solely because it is electronic. Va. Code §§ 59.1-483(b), 59.1-485(a).

Separate, optional electronic-transaction consent: Each Partner who agrees to conduct this transaction electronically checks the box and initials here: Partner [NAME] ☐ Initials [____]; Partner [NAME] ☐ Initials [____]; additional Partners [NAMES AND INITIALS] ☐. Use paper signatures unless every Partner separately consents.

15.9 Interpretation. Headings for convenience; "including" means "including without limitation"; singular includes plural.

15.10 Force Majeure. No liability for failure to perform (except payment) caused by events beyond reasonable control ("Force Majeure Event"), with prompt notice and mitigation.

15.11 No Third-Party Beneficiaries. No rights conferred on non-parties.

15.12 Further Assurances. Partners shall execute additional documents as necessary.

ARTICLE 16: VIRGINIA-SPECIFIC PROVISIONS

16.1 Governing Statute. This Partnership is governed by the Virginia Uniform Partnership Act, Va. Code Ann. Section 50-73.79 et seq., which is Chapter 2.2 of Title 50 of the Code of Virginia. Enacted in 1996, this chapter applied to newly formed partnerships beginning July 1, 1997 and to all partnerships beginning January 1, 2000 under § 50-73.147. Key features:

(a) Entity Theory. The Partnership is a separate legal entity distinct from its Partners (Va. Code Ann. Section 50-73.87);

(b) Dissociation vs. Dissolution. A Partner's dissociation does not necessarily result in dissolution (Va. Code Ann. Section 50-73.117);

(c) Permissive Partnership Agreement. The Act provides default rules modifiable by the partnership agreement, subject to Va. Code Ann. Section 50-73.81, which bars eliminating good faith and fair dealing, unreasonably restricting records access, and varying specified winding-up and judicial protections; and

(d) Virginia State Corporation Commission. The SCC serves as the filing authority for partnership statements, including Statements of Partnership Authority, Dissociation, and Dissolution.

16.2 Statement of Partnership Authority (Form UPA-93).

(a) The Partnership may file a Statement of Partnership Authority with the SCC using Form UPA-93 (or its successor), pursuant to Va. Code Ann. Section 50-73.93.

(b) Contents. The Statement must include:
(i) The Partnership's name;
(ii) The SCC identification number (if previously issued);
(iii) The street address of the chief executive office and one office in Virginia (if any);
(iv) The names and mailing addresses of all Partners or an agent maintaining the list;
(v) The names of Partners authorized to execute instruments transferring real property held in the Partnership name; and
(vi) Any grant or limitation of authority the Partnership wishes to disclose.

(c) Filing Fee. The filing fee for a Statement of Partnership Authority is $25 (as of the date of this Agreement; verify current fee with the SCC).

(d) Execution. The Statement must be signed by at least two (2) Partners.

(e) Real Property Authority. A filed Statement of Partnership Authority that grants authority to transfer real property is conclusive in favor of a person who gives value without knowledge to the contrary, if a certified copy of the Statement is of record in the office of the clerk of the circuit court in the county or city where the real property is located (Va. Code Ann. Section 50-73.93(d)).

(f) Duration. The Statement is effective for five (5) years unless canceled or superseded.

(g) Critical for Real Property Transactions. Virginia law practitioners strongly recommend that any partnership holding or intending to acquire Virginia real property file a Statement of Partnership Authority and record it in the circuit court clerk's office where the property is located.

(h) The Partners elect:

☐ To file a Statement of Partnership Authority (Form UPA-93) with the SCC
☐ To file and record the Statement in the circuit court clerk's office for real property purposes
☐ Not to file at this time

16.3 Virginia State Corporation Commission (SCC).

(a) The SCC is the filing authority for business entities in Virginia, including partnerships.

(b) Contact Information:

Virginia State Corporation Commission
Clerk's Office
Tyler Building, 1st Floor
1300 East Main Street
Richmond, VA 23219
Telephone: (804) 371-9733
Toll Free: (866) 722-2551
Website: www.scc.virginia.gov

(c) Online filings and searches are available through the SCC's Clerk's Information System (CIS) at: https://cis.scc.virginia.gov

16.4 Filing Fees.

16.5 Virginia State Income Tax.

(a) Virginia imposes an individual income tax with rates ranging from 2% to 5.75% (as of the date of this Agreement; highest bracket applies to income over $17,000).

(b) The Partnership is a pass-through entity for Virginia tax purposes. Each Partner reports their distributive share on their individual Virginia income tax return (Form 760 for residents; Form 763 for nonresidents).

(c) The Partnership must file Virginia Form 502 (Pass-Through Entity Return of Income and Return of Nonresident Withholding Tax) with the Virginia Department of Taxation.

(d) Nonresident Withholding. Under Va. Code § 58.1-486.2, the Partnership generally withholds Virginia income tax at 5% of each nonresident owner's Virginia-source share. Apply an exception only when its statutory conditions are met; a nonresident's filing of an individual return alone does not remove the withholding duty. A written undue-hardship exemption petition requires approval by the Virginia Tax Commissioner, not the State Corporation Commission.

(e) Pass-Through Entity Tax (PTET) Election. See Section 4.7.

(f) Virginia Department of Taxation:
Post Office Box 1115
Richmond, VA 23218
Telephone: (804) 367-8031
Website: www.tax.virginia.gov

16.6 Virginia Business Professional and Occupational License (BPOL) Tax.

(a) Virginia localities may impose a local BPOL tax on businesses operating within their jurisdiction.

(b) BPOL rates and thresholds vary by locality and business classification.

(c) The Partnership shall register for and pay applicable BPOL taxes in each locality where it conducts business.

(d) Some localities also impose a local business tangible personal property tax.

16.7 Real Property Partnerships -- Special Virginia Considerations.

(a) Importance of Statement of Partnership Authority. If the Partnership holds or acquires real property in Virginia, filing a Statement of Partnership Authority with the SCC and recording a certified copy in the circuit court clerk's office where the property is located is strongly recommended. Without such filing:

(i) Title companies may require additional evidence of a Partner's authority to convey real property;
(ii) Third parties dealing with the Partnership may not have constructive notice of Partners' authority; and
(iii) Real property transactions may be more difficult to complete.

(b) Recording Requirements. Virginia law requires recording in the circuit court clerk's office of the city or county where real property is located (not at the state level). A certified copy of the Statement of Partnership Authority must be obtained from the SCC and then recorded locally.

(c) Conveying Partnership Real Property. Under Va. Code Ann. Section 50-73.92, subject to the effect of any Statement of Partnership Authority:

(i) Property acquired in the Partnership name may be transferred in the Partnership name;
(ii) Property acquired in the name of one or more Partners with a Partnership interest indication may be transferred by an instrument executed by those Partners;
(iii) A deed to real property signed by an authorized Partner in the Partnership name is sufficient to convey Partnership real property.

(d) Effect of Statement on Real Property. Under Va. Code Ann. Section 50-73.93(d) and (e):

(i) A grant of authority to transfer real property contained in a filed and locally recorded Statement is conclusive in favor of a good-faith purchaser for value;
(ii) A limitation on authority to transfer real property in a filed and locally recorded Statement is effective against third parties with notice; and
(iii) A filed Statement that restricts authority to transfer real property is effective even if the real property is located outside Virginia, provided the Statement is recorded where the property is located.

16.8 LLP Registration Option. Under Va. Code Ann. Section 50-73.132, the Partnership may register as an LLP by filing a Statement of Registration (Form LLP-1011) with the SCC:

(a) The name must contain "Registered Limited Liability Partnership," "Limited Liability Partnership," "R.L.L.P.," "L.L.P.," "RLLP," or "LLP";
(b) Filing fee: $100;
(c) Provides a liability shield under Va. Code Ann. Section 50-73.96(C);
(d) Must maintain a registered office and qualified registered agent under Va. Code Ann. Section 50-73.135; and
(e) Must file an annual continuation report with the $50 filing fee by July 1 under Va. Code Ann. Sections 50-73.134 and 50-73.83(F)(2).

16.9 Annual Registration Fee (LLP Only).

(a) An LLP must file its annual continuation report and $50 fee by July 1 of each year after the calendar year of registration (Va. Code Ann. Sections 50-73.134(A)-(B), 50-73.83(F)(2)).

(b) If the report or fee is missing on September 1, the SCC must mail impending-cancellation notice. If either remains missing on November 1, registration is automatically canceled under Section 50-73.134(C).

(c) A general partnership that has not registered as an LLP does not owe this annual LLP continuation report fee. A separate fee applies when filing a Statement of Partnership Authority.

16.10 Merger and Conversion.

(a) Under Va. Code Ann. Section 50-73.126:1 et seq., the Partnership may merge with one or more domestic or foreign partnerships.

(b) A plan of merger requires approval by all Partners.

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

(d) Conversion to an LLC, corporation, or other entity type may also be available under applicable Virginia statutes.

16.11 Virginia Uniform Trade Secrets Act. Virginia has adopted the Uniform Trade Secrets Act (Va. Code Ann. Section 59.1-336 et seq.), which provides:

(a) Injunctive relief for actual or threatened misappropriation of trade secrets;
(b) Damages for misappropriation, including actual loss and unjust enrichment;
(c) Enhanced damages (up to double) for willful and malicious misappropriation; and
(d) Attorneys' fees may be awarded in cases of willful and malicious misappropriation or bad faith claims.

The confidentiality obligations in Article 7.4 are supplemental to the protections available under this statute.

16.12 Virginia Workers' Compensation. Under Va. Code Ann. Section 65.2-101, employers regularly having three (3) or more employees in the same Virginia business generally must carry workers' compensation insurance. The fewer-than-three-employees exemption does not apply to underground coal mine operators or their employees. The Partnership shall comply if applicable.

16.13 Virginia Statute of Limitations.

(a) Claims on a contract not otherwise specified that is in writing and signed by the party to be charged: five (5) years (Va. Code Ann. § 8.01-246(A)(2));
(b) Claims on an unsigned writing or an unwritten express or implied contract: three (3) years (Va. Code Ann. § 8.01-246(A)(4));
(c) Fraud: two (2) years after accrual under Va. Code Ann. § 8.01-243(A); § 8.01-249(1) deems accrual to occur when the fraud is discovered or reasonably should have been discovered through due diligence;
(d) Partners should preserve claims promptly. The one-year post-dissociation liability window in Va. Code Ann. Section 50-73.114(B) concerns when qualifying obligations are incurred; it is not a suit-filing deadline.

16.14 Fictitious Name Registration. Under Va. Code Ann. Section 59.1-69 et seq., if the Partnership operates under a name other than the legal names of all Partners, it must file a fictitious name certificate with the clerk of the circuit court in each locality where business is conducted. Failure to file may result in the inability to maintain an action in Virginia courts under the fictitious name.

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

COMMONWEALTH OF VIRGINIA
CITY / COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned Notary Public in and for the Commonwealth of Virginia, 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 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.

☐ [________________________________], 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 to me 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 Registration Number: [________________________________]

[NOTARY SEAL]

SCHEDULE A: PARTNERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

Non-Cash Contribution Descriptions:

Partner [____]: [________________________________]
Agreed FMV: $[________________________________]
Basis: [________________________________]

SCHEDULE B: STATE-SPECIFIC RIDER

B.1 Partnership Classification:

☐ Partnership at will
☐ Partnership for a definite term of [____] years
☐ Partnership for a particular undertaking: [________________________________]

B.2 Statement of Partnership Authority (Form UPA-93):

☐ Filed with Virginia SCC on [__/__/____] -- SCC ID No.: [________________________________]
☐ Recorded with circuit court clerk of [________________________________] on [__/__/____]
☐ Not filed

B.3 Real Property Authority. Partners authorized to execute instruments transferring real property held in the Partnership name:

☐ [________________________________]
☐ [________________________________]

B.4 Virginia Pass-Through Entity Tax (PTET) Election:

☐ Elected for tax year [____]
☐ Not elected
☐ To be determined

B.5 BPOL Tax Registration:

☐ Registered in [________________________________] locality -- Account No.: [________________________________]
☐ Not yet registered

B.6 Fictitious Name Certificate:

☐ Filed with circuit court clerk of [________________________________] on [__/__/____]
☐ Not applicable (Partnership name includes all Partner names)

B.7 Registered Agent (if SCC filing made):

Agent Name: [________________________________]
Physical Address: [________________________________], Virginia [____]

SCHEDULE C: FORM OF JOINDER AGREEMENT

JOINDER TO GENERAL PARTNERSHIP AGREEMENT

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

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

New Partner:

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

Printed Name: [________________________________]

Acknowledged by Existing Partners:

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

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

SCHEDULE D: PARTNERSHIP PROPERTY (INITIAL)

Note for Real Property: If the Partnership acquires real property in Virginia, a Statement of Partnership Authority should be filed with the SCC and a certified copy recorded with the circuit court clerk in the county or city where the property is located.

SCHEDULE E: VIRGINIA REAL PROPERTY CHECKLIST (IF APPLICABLE)

If the Partnership holds or will hold Virginia real property, the following steps should be completed:

☐ File Statement of Partnership Authority (Form UPA-93) with the SCC ($25 fee)
☐ Obtain certified copy from the SCC
☐ Record certified copy with the circuit court clerk in each county/city where real property is located
☐ Ensure deed references the Partnership name and authorized Partner
☐ Update Statement of Partnership Authority if Partners change
☐ Verify title insurance company acceptance of Partnership conveyance documents
☐ Review local transfer tax requirements (Va. Code Ann. Section 58.1-800 et seq.)

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 the Commonwealth of Virginia 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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