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Partnership Agreement

A contractual joint venture (JV) lets two companies collaborate on a specific opportunity without forming a new legal entity — no new limited company, no partnership under the Partnership Act 1890. This template is drafted under English law and covers the essentials: each party's contribution, how revenue and cost are shared, governance and decision-making, ownership of pre-existing and newly created IP, confidentiality, and how the venture is wound up on exit.

When do you need this?

Typical use cases

  • Two companies bringing complementary capability together on a defined project
  • A tech company and a market player launching a joint product
  • A strategic collaboration where a new corporate entity would be too heavy
  • Formalising an existing informal collaboration
What the contract includes

The contract covers

Identification of both parties (companies with contact persons)
Clear statement of Purpose
Description of each party's contribution
Net revenue / net cost sharing ratio
Steering committee governance
Distinction between ordinary and material decisions
Background vs Foreground IP with licence-back arrangements
Confidentiality with post-termination survival
Express negation of partnership, agency and employment
Term with rolling notice, or fixed duration
Wind-up mechanism on exit
Governing law and jurisdiction — England and Wales

Legal basis

This template is drafted under the laws of England and Wales. The Partnership Act 1890 defines a partnership as the relation between persons carrying on a business in common with a view of profit, which creates joint and several liability for partners. This template deliberately excludes that characterisation and structures the arrangement as a contractual collaboration — each party remains separately liable for its own actions. Competition law (Competition Act 1998 / Chapter I) limits how far competitors can coordinate; joint ventures between competitors need particular care around information exchange and market coordination.

Questions about partnership agreement

Frequently asked questions

What is the difference between a contractual JV and a corporate JV?
A corporate JV creates a new legal entity (typically a limited company) owned by both parties, which contracts with third parties, holds IP, employs staff and files its own accounts. It gives clean limited liability and clear governance, but is heavier to set up, run and wind up. A contractual JV — as in this template — is just an agreement between two existing companies; there is no new entity to form or dissolve, but the parties each contract directly with third parties and there is no independent balance sheet.
Who owns IP created during the collaboration?
Under this template, newly created IP (Foreground IP) is owned in the same ratio as the revenue split, but each party has a licence to use it in its own separate business (excluding sublicensing to competitors). Pre-existing IP (Background IP) stays with the party that brought it, licensed to the venture for the duration. In practice, it pays to be explicit about which pieces of IP are foreground versus background — arguments about ownership of jointly developed technology are one of the most common JV disputes.
Can we compete with each other after the JV ends?
Generally yes. Post-termination non-compete restraints are enforceable only if narrow, proportionate and time-limited, and even then are viewed sceptically as restraints of trade. Confidentiality obligations continue and protect against misuse of the other party's know-how, but neither party is prevented from operating in the same market as the other after wind-up. If the JV created a genuinely joint business with joint customers, buy-out mechanics may be needed instead of a non-compete.
Do we need to notify HMRC or Companies House?
No — a contractual JV is not a filed entity. Each party continues to file its own accounts and returns as normal. However, revenue and costs allocated between the parties may have VAT and transfer pricing implications (particularly for related parties), and joint tax filings may be needed if the collaboration is characterised as a partnership for tax purposes despite being drafted otherwise. Take tax advice on any material JV.

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