Related Expertise
- Account collection
- Addition or departure of shareholders
- Bankruptcy and Restructuring
- Buy-Sell Agreement
- Change in the legal form of a company
- Commercial litigation (shareholders, employees or others)
- Company Book
- Consignment Contract
- Contract of partnership
- Convertible debenture
- Corporate reorganization and restructuring
- Corporate resolutions
- Creation of a subsidiary
- Director’s liability
- Drafting of articles of constitution
- Franchising
- Governance and Internal Management
- Implementation of a Tax Memo
- Intellectual Property
- Joint Venture Agreement
- Legal Publicity of Enterprises
- Management Company
- Planning and Tax Litigation
- Preparation and review of commercial leases
- Securities and access to public markets
- Share subscription agreement
- Shareholders Agreement
- Starting a business
- Strategic Partnership
- Taxation and tax litigation
- Term Sheet
- The Letter of Intent of the Offer to Purchase
- Trusts (estate and asset protection)
- Unfair competition, Duty of loyalty
The contract of partnership is a contract that governs the relationship between partners in a partnership. This contract is usually concluded for general partnerships, although it may also apply to limited partnerships. As far as business corporations are concerned, it is usually the shareholder agreement that governs the relationship between the shareholders.
Several elements are essential to contracts of partnership. The first paragraph of section 2186 of the Civil Code of Québec reads as follows:
- A contract of partnership is a contract by which the parties, in a spirit of cooperation, agree to carry on an activity, including the operation of an enterprise, to contribute thereto by combining property, knowledge or activities and to share among themselves any resulting pecuniary profits.
Thus, the presence of a common goal pursued by the partners, the intention to contribute by combining property, knowledge or activities and profit-sharing are the essential elements of a contract of partnership.
It is interesting to note that the contract of partnership, common in commercial law, can be formed by a simple verbal agreement¹. However, a verbal contract could reveal problematic. For example, it will be more difficult to prove the initial intention of the partners, or even the mere existence of the contract itself.
In addition, there are certain exceptions where the law requires the contract of partnership to be in writing. In particular, section 187.15 of the Professional Code requires members of a professional order who wish to form a limited liability partnership to so stipulate expressly in a written agreement. Moreover, if they want this partnership to cease to be a limited liability one, they must also specify it expressly in writing.
The contract of partnership plays an important role in the business structure. First of all, the partnership is formed at the conclusion of the contract, unless another date of formation is indicated². A duly drafted contract of partnership is an important tool for starting a successful business. This contract may also provide for solutions in the event of a disagreement between the partners. It is therefore important to draft a comprehensive contract that will address several contingencies. That’s why Bernier Fournier is there to support you in the process of drafting a contract of partnership.
Thus, if you want to know if the drafting of a contract of partnership is necessary in the context of the formation of your company or if you simply wish to draft a contract adapted to your needs, Bernier Fournier can help you through all these steps.
¹S. 1385 C.c.Q.. Section 2186 of the Civil Code of Québec does not provide for any specific form to ensure the validity of the contract of partnership. Certain exceptions to this principle are created by special legislative provisions.
²S. 2187 C.c.Q.