General Partnership Agreement
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Introduction
The general partnership (one of three types of partnerships proposed in Section 2188 CCQ), the rules for which are found in Sections 2198 to 2235 CCQ, is of particular interest to professionals whose practice is governed by the Professional Code. Since the Civil Code of Quebec tend to play a mostly completive role in determining the rights and obligations of partners in a general partnership, it is in the interest of shareholders to execute a partnership agreement to provide a more comprehensive framework. This form of business partnership is a vehicle enabling legal professionals to practice their profession as a group.
Note that the Professional Code, RSQ c. C-26. now allows members of a professional corporation to exercise their professional activities within a limited liability partnership "LLP" or a corporation.
The following document establishes the legal, economic, organizational and operational framework of a partnership.
Description
The General Partnership Agreement is the legal instrument which is used to evidence the operation by which two or more members of a professional corporation elect to work together to exercise their profession and to share the profits or losses generated by their activities.
Use
First, this document is used to establish a general partnership, instead of other types of partnerships, and to record all terms governing each of the partners. We recommend using this document to govern the legal relationship of all groups of professionals electing to practice their profession as a general partnership.
Table of Contents
PREAMBLE
0.00 INTERPRETATION
0.01 Terminology
0.01.01 Activities
0.01.02 Agreement
0.01.03 Collaborators
0.01.04 Contributions
0.01.05 Counsel Partner
0.01.06 Effective Net Distributable Profit
0.01.07 End of the Financial Year
0.01.08 Founding Partners
0.01.09 Legal Representatives
0.01.10 Ordinary Resolution
0.01.11 Partners
0.01.12 Partnership
0.01.13 Preferred Rate
0.01.14 Private Contributions
0.01.15 Reserved Contributions
0.01.16 Responsible Partner
0.01.17 Shares
0.01.18 Sharing in the Losses
0.01.19 Source Partner
0.01.20 Special Resolution
0.01.21 Unanimous Resolution
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Presumption
0.03.03 Adaptation
0.03.04 Continuation or Rescission
0.04 Miscellaneous
0.04.01 Computation of Time
0.04.02 Cumulative Rights
0.04.03 Canadian Currency
0.04.04 Gender and Number
0.04.05 Headings
1.00 INCORPORATION
1.01 The Partnership's Name
1.02 Objective
1.03 Capital
1.04 Head Office
1.05 Financial Year
1.06 Legal Publicity
2.00 CAPACITY AND POWERS OF THE PARTNERSHIP
2.01 Administration
2.01.01 Board of Directors
2.01.02 Powers of the Board of Directors
2.01.03 Dismissal and Replacement
2.01.04 Ratification
a) Unanimous Resolution:
b) Special Resolution (or Ordinary Resolution)
2.01.05 Responsibility
2.02 Banking Matters
2.02.01 Commercial Bank Account
2.02.02 Fiduciary trust
2.03 Books and Registers
2.04 Auditors
2.05 Financial Statements
2.06 Right to Borrow
2.07 Presumption
2.08 Admission of a New Partner
2.08.01 Eligibility
2.08.02 Procedure
2.08.03 Contribution
2.08.04 Roll over
2.08.05 Right to Vote
2.09 Property
2.09.01 Use
2.09.02 Preservation
2.09.03 Alienation
2.10 Expulsion of a Partner
3.00 CAPACITY AND POWERS OF THE PARTNERS
3.01 Meeting of the Partners
3.01.01 Annual Meeting
3.01.02 Special Meeting
3.01.03 Place of Meeting
3.02 Calling of Meetings
3.02.01 Notice of Meeting
3.02.02 Waiver of Right to Notification
3.02.03 Incomplete Notification
3.02.04 Failure to Transmit Notice
3.03 Procedure at Meetings
3.03.01 Adjournment
3.03.02 Quorum
3.03.03 The Right to Vote
3.03.04 Exercising of the Right to Vote
3.03.05 Proxies
3.03.06 Deposit of Proxies
3.03.07 Presiding Officer
3.03.08 Procedure
3.03.09 Signed Resolution
3.04 Contributions to the Partnership
3.04.01 Capital Contribution
a) Initial Contribution
b) Surplus
c) Increase of the Capital Contribution
d) Reimbursement Resulting from a Reduction of Capital
3.04.02 Reimbursement of the Capital Contributions
3.04.03 Contribution by Credit
3.04.04 Contribution by Activities
3.05 Obligation to Practice
3.06 Loyalty
3.07 Liability with Regard to Third Parties
3.07.01 The Partners
3.07.02 The General Partnership
3.08 Prohibited Acts
3.09 Distribution of Losses
3.10 Contribution for Losses
3.11 Indemnification
3.12 Protection of the General Partnership
3.12.01 Confidentiality Agreement
3.12.02 Non-solicitation Agreement
3.13 Profit Sharing
3.13.01 Point System
a) Contribution in Capital
b) Contribution in Time
c) Contribution in Clientele
d) Contribution in Experience
e) Contribution in Skill
3.13.02 Determination of Profits
3.13.03 Annual Distribution of Profits
3.13.04 Suspension of Right to Share in Profits
3.14 Withdrawal
3.15 Reimbursement of Expenses
3.16 Work in Progress
3.17 Access to Documentation
3.18 Retirement and Retirement Fund
3.19 Disability
3.20 Leave of Absence
3.20.01 Vacation
3.20.02 Prolonged Leave
3.21 Congress
3.22 Personal Matters
3.23 Hypothec
4.00 WITHDRAWAL OF A PARTNER
4.01 Voluntary Withdrawal
4.01.01 Procedure
4.01.02 Notification
4.01.03 Refusal
4.01.04 Terms of Payment
a) Internal Sale
b) External Sale
c) Restitution of the Common Share
4.02 Forced Withdrawal
4.02.01 Procedure
4.02.02 Method of Payment
4.03 Dissension
4.03.01 Procedure
4.03.02 Notice
4.03.03 Failure to Notify
4.03.04 Respect for the Formalities
4.04 Liberation and Reimbursement
5.00 EXTERNAL OFFER TO PURCHASE
5.01 Offer to Purchase a Part or All of a Partner’s Common Share
5.01.01 Notification of Sale
5.01.02 First Option to Purchase
5.01.03 Second Option to Purchase
5.01.04 Refusal
5.01.05 Closing Session
5.01.06 Terms and Conditions of Payment
5.02 Offer to Purchase all the General Partnership’s Common Shares Issued and in Circulation
5.02.01 Applicability
5.02.02 Notice of Acceptance and Disclosing of the External Offer
5.02.03 Reply of the Minority Partners with Regards to the Options
5.02.04 Modification of the External Offer
5.03 External Offer of Good Faith
5.04 Waiver
6.00 DEATH OF A PARTNER
6.01 Compulsory Sale
6.02 Methods of Payment
6.02.01 Initial Amount
6.02.02 Balance
6.02.03 Interest
6.02.04 Promissory Note
6.02.05 Disbursements
6.02.06 Arrival of Term
6.02.07 Payment in Anticipation
6.02.08 Solidarity and Indivisibility
6.02.09 Default of Term
6.03 Two (2) Deaths Within Sixty (60)Days
6.04 Protection of the Succession
7.00 EVALUATION AND CALCULATION OF COMMON SHARES
7.01 Value
7.02 Establishing the Initial Value
7.03 Alternate Determination of the Value
7.03.01 Auditors
7.03.02 External Chartered Accountant
7.03.03 Rules Applicable to the Calculation of a Common Share
8.00 FINANCING
8.01 Life Insurance Subscription
8.01.01 Initial Subscription
8.01.02 Subsequent Subscriptions
8.02 Partners’ Obligations
8.02.01 Payment of Premium
8.02.02 Prohibition
8.02.03 Additional Protection
8.02.04 Modifications to the Policies
8.02.05 Sale upon Death
8.02.06 Sale
8.02.07 Dissolution of the General Partnership
8.02.08 End of Contract
9.00 SPECIAL PROVISIONS
9.01 Non-Transferable
9.02 Certification
10.00 GENERAL PROVISIONS
10.01 Schedules
10.02 Arbitration
10.03 Notices
10.04 Choice of Venue
10.05 Amendments
10.06 Non-Waiver
11.00 END OF CONTRACT
11.01 Dissolution of the Partnership
11.02 Liquidation of the Partnership
11.02.01 Notice
11.02.02 Preparation of a Statement of Accounts
11.02.03 Conversion into Legal Tender
11.02.04 Dissolution of the Agreement
11.02.05 Payment of Debts
11.02.06 Sharing of the Residual
11.02.07 Clientele
11.02.08 Collection of the Partnership's claims
11.02.09 Using of the Partnership's Name
12.00 COMMENCEMENT OF EFFECT
13.00 DURATION
14.00 SCOPE
14.01 Previous Agreement
14.02 Transmission
SCHEDULE A - CONTRIBUTIONS TO THE PARTNERSHIP
SCHEDULE B - LIST OF PRIVATE CONTRIBUTIONS
SCHEDULE C - LIST OF CONTRIBUTIONS
SCHEDULE D - VALUE OF THE COMMON SHARES
SCHEDULE E - LIFE INSURANCE
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