Which document defines the terms and conditions of a partnership?

Which document defines the terms and conditions of a partnership?

• A. Operating Agreement
• B. Business Plan
• C. Partnership Agreement
• D. Non-Disclosure Agreement

Answer: (C)

The document that defines the terms and conditions of a partnership is the Partnership Agreement. This key legal document outlines the structure of the partnership, including the roles and responsibilities of each partner, the distribution of profits and losses, procedures for decision-making, and the protocols for adding or removing partners. It serves as the foundational agreement that governs the relationship between the partners, ensuring everyone is on the same page regarding their obligations and expectations. In contrast, other documents mentioned serve different purposes. An Operating Agreement is typically used for limited liability companies (LLCs) and outlines the management structure and operating procedures of the LLC. A Business Plan is a document that outlines the overall business strategy, goals, market analysis, and financial forecasts, but does not specifically address the partnership arrangements. A Non-Disclosure Agreement is intended to protect confidential information shared between parties and does not pertain to the governance of a partnership. Thus, the Partnership Agreement is crucial for establishing a clear framework for the partnership's operation.

The document that defines the terms and conditions of a partnership is the Partnership Agreement. This key legal document outlines the structure of the partnership, including the roles and responsibilities of each partner, the distribution of profits and losses, procedures for decision-making, and the protocols for adding or removing partners. It serves as the foundational agreement that governs the relationship between the partners, ensuring everyone is on the same page regarding their obligations and expectations.

In contrast, other documents mentioned serve different purposes. An Operating Agreement is typically used for limited liability companies (LLCs) and outlines the management structure and operating procedures of the LLC. A Business Plan is a document that outlines the overall business strategy, goals, market analysis, and financial forecasts, but does not specifically address the partnership arrangements. A Non-Disclosure Agreement is intended to protect confidential information shared between parties and does not pertain to the governance of a partnership. Thus, the Partnership Agreement is crucial for establishing a clear framework for the partnership's operation.