B2B | Small Business

Amending a Partnership Agreement

Author: Gail Sessoms
Publish Date: 

Business owners create one of three types of partnerships: general, limited and limited liability. The creation of a general partnership does not require the filing of documents with a government agency or court. The creation of a limited or limited liability partnership requires the filing of a legal document. All states except Louisiana have adopted the Uniform Partnership Act and the subsequent Revised Uniform Partnership Act to regulate the formation and operation of partnerships.

The partnership agreement allows business owners to control certain aspects of the partnership by establishing the structure of the business relationship and detailing the rights and responsibilities of the partners. Provisions include profit share amounts due to members, processes for adding partners, buyout provisions for exiting partners, dispute resolution and management and decision-making processes. The provisions of the partnership agreement meet the needs of the business and its partners.

Partners may amend their partnership agreement at any time with the unanimous consent of all partners, according to the Revised Uniform Partnership Act. A statement of qualifications is considered an amendment to a partnership agreement when used to change the structure of a general partnership to a limited or limited liability partnership, according to the Revised Uniform Partnership Act. The decision to file the statement of qualifications requires a unanimous vote of all partners. Partnerships may file the required forms to convert from limited to limited liability partnership, to convert to a general partnership or to reverse an earlier conversion. The effect of these actions that require a unanimous vote is to amend the partnership agreement.

An amendment to a partnership agreement is a legal document that includes specific information about the action, such as a statement that the amendment is made by unanimous consent, a statement that the undersigned agree to the amendment and an explanation of the amendment. For instance, the amendment may change the amount of allocations distributed to partners or establish the process for entering into a contractual relationship with a broker. The amendment with the required signatures must be filed with the state agency that regulates partnerships. In many states, the office of the secretary of state enforces state laws concerning corporations, businesses and partnerships. State offices often provide forms for filing amendments. An attorney can help draft the amendment to make sure it is legal and enforceable.

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