What should I include in a partnership agreement when forming a business in Texas?

When forming a business as a partnership in Texas, it is essential to have a partnership agreement which outlines the terms and conditions of the partnership. The partnership agreement should be in writing and signed by all partners. The following are key elements that should be included in a partnership agreement in Texas:

1. Partner Contributions: The partnership agreement should clearly state each partner's contribution, whether it is in the form of cash, property, or services.
2. Division of Profits and Losses: The partnership agreement should outline how profits and losses will be divided among the partners, including the percentage distribution, and the frequency of the payments.
3. Management Authority and Duties: The partnership agreement should clearly define the scope of each partner's management authority, roles, and responsibilities, including how decisions will be made and who will make them.
4. Partnership Dissolution: A partnership agreement should provide procedures for the dissolution of the partnership, including how assets and liabilities will be distributed among the partners and any other specific provisions related to dissolution.
5. Dispute Resolution: The partnership agreement should include provisions for resolving disputes among the partners, including mediation or arbitration clauses.
6. Non-Disclosure and Non-Compete Agreements: A partnership agreement should include non-disclosure and non-compete clauses to protect the partnership's confidential information and prevent partners from competing with the business.
7. Buyout or Buy-Sell Provision: The partnership agreement should provide for the possibility of a partner's departure from the business and outline the procedure for a buyout or buy-sell agreement.
8. Legal Representation: The partnership agreement should state whether the partnership will pay for legal representation in case of a dispute or lawsuit.

It's important to note that Texas law does not require a written partnership agreement, but having one in place can help avoid disputes and address potential problems proactively. Additionally, each partnership may have unique circumstances that require additional terms or provisions in the partnership agreement. Thus, it is advisable to consult with an experienced attorney to ensure the partnership agreement accurately reflects the unique needs and interests of the partners.