Business Setup

Business Partnership Agreement

A Business Partnership Agreement defines the rights and obligations of business partners in Kenya. Covers profit sharing, decision-making, capital contributions, and dissolution procedures.

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Drafted to comply with Kenyan law and international common law standards.

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What this document covers

Partners' names and contributions
Business name and purpose
Profit and loss sharing ratios
Capital contributions
Management and decision-making rights
Banking and financial controls
Partner exit and buyout provisions
Dissolution procedure
Governing law (Partnerships Act 2012)

Frequently Asked Questions

Is a business partnership agreement required by law in Kenya?
No, but it is strongly recommended. Under the Partnerships Act 2012 (which replaced Cap. 29), a partnership can exist without a written agreement, but the Act's default rules will apply — equal profit sharing, equal management rights, and unanimous consent for major decisions — which may not reflect what the partners actually intended.
What is the liability of partners in a Kenyan business partnership?
In a general partnership, all partners have unlimited joint and several liability for the partnership's debts and obligations. This means a creditor can pursue any partner for the full debt. A limited liability partnership (LLP) under the Limited Liability Partnerships Act 2011 limits partners' personal liability.
Is a business partnership agreement valid in common law countries?
Yes. Partnership agreements are enforceable across all common law jurisdictions. The governing legislation varies (UK Partnership Act 1890, Australian partnership statutes, Kenya's Partnerships Act 2012), but the core principles are similar. Specify the governing law if partners are in different countries.