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Operating Agreement Between Partners for Philippines

Operating Agreement Between Partners Template for Philippines

A comprehensive legal document governed by Philippine law that establishes and regulates the relationship between business partners, defining their rights, responsibilities, and obligations within the partnership structure. This agreement outlines capital contributions, profit-sharing arrangements, management rights, decision-making processes, and procedures for handling various business scenarios including partner exits and dispute resolution. It ensures compliance with Philippine partnership laws, including relevant provisions of the Civil Code and other applicable business regulations, while providing a clear framework for partnership operations and governance.

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Operating Agreement Between Partners

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What is a Operating Agreement Between Partners?

The Operating Agreement Between Partners serves as the foundational document for partnerships operating under Philippine law, establishing the legal and operational framework for business partnerships. This document is essential when two or more parties wish to formalize their business relationship as partners, whether in a new venture or an existing business. It addresses crucial aspects such as capital contributions, profit sharing, management rights, and operational procedures, while ensuring compliance with Philippine regulations, particularly the Civil Code's partnership provisions and relevant business laws. The agreement is particularly important as it helps prevent future disputes by clearly defining partner rights and responsibilities, decision-making processes, and exit procedures. It should be customized to reflect specific business needs while maintaining alignment with Philippine legal requirements.

What sections should be included in a Operating Agreement Between Partners?

1. Parties: Identification of all partners, including their full legal names and addresses

2. Background: Context of the partnership formation, business purpose, and intent of the parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Partnership Formation: Declaration of partnership formation, business name, and principal place of business

5. Term and Commencement: Duration of the partnership and conditions for commencement

6. Capital Contributions: Initial and ongoing capital contributions of each partner

7. Ownership Interests: Partnership interests, profit and loss sharing ratios

8. Management and Voting: Management structure, voting rights, and decision-making processes

9. Meetings and Resolutions: Procedures for partner meetings and passing resolutions

10. Financial Affairs: Banking, accounting, audit requirements, and financial reporting obligations

11. Distributions: Rules for profit distributions and drawing accounts

12. Transfer Restrictions: Limitations on transfer of partnership interests

13. Withdrawal and Retirement: Process and terms for partner withdrawal or retirement

14. Dissolution and Liquidation: Circumstances and procedures for partnership dissolution

15. Governing Law: Specification of Philippine law as governing law

16. Dispute Resolution: Procedures for resolving disputes between partners

17. Notices: Process for giving formal notices under the agreement

18. General Provisions: Miscellaneous legal provisions including severability, entire agreement, and amendments

What sections are optional to include in a Operating Agreement Between Partners?

1. Non-Competition: Restrictions on partners competing with the partnership, used when protecting business interests is crucial

2. Intellectual Property: IP ownership and usage rights, included when the partnership involves significant IP assets

3. Employment of Partners: Terms for partners working in the business, used when partners take active management roles

4. Insurance: Required insurance coverage, included when business activities require specific insurance protection

5. Confidentiality: Protection of partnership secrets and confidential information, important for partnerships with sensitive information

6. Death or Incapacity: Succession planning provisions, important for family businesses or long-term partnerships

7. Foreign Investment Provisions: Special provisions for foreign partners, required when partnership includes non-Filipino partners

What schedules should be included in a Operating Agreement Between Partners?

1. Schedule A - Capital Contributions: Detailed breakdown of each partner's initial and committed capital contributions

2. Schedule B - Partnership Interests: Detailed allocation of ownership percentages and profit/loss sharing ratios

3. Schedule C - Business Plan: Initial business plan and strategic objectives

4. Schedule D - Management Structure: Detailed organizational chart and management responsibilities

5. Schedule E - Authorized Signatories: List of partners authorized to sign various documents

6. Appendix 1 - Form of Partner Resolution: Template for partner resolutions

7. Appendix 2 - Transfer Notice: Standard form for notifying transfer of partnership interests

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions










Clauses













































Relevant Industries

Professional Services

Retail and Commerce

Manufacturing

Real Estate and Property Development

Food and Beverage

Technology and Software

Construction

Agriculture

Healthcare Services

Consulting Services

Tourism and Hospitality

Import/Export

Educational Services

Financial Services

Relevant Teams

Legal

Finance

Corporate Governance

Executive Leadership

Operations

Compliance

Risk Management

Business Development

Corporate Affairs

Partnership Management

Relevant Roles

Business Owner

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Business Development Manager

Operations Director

Finance Director

Compliance Officer

Partner Relations Manager

Risk Manager

Investment Manager

General Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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