Last updated February 27, 2024
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What is a Partnership Amendment?
A Partnership Amendment, also called a Partnership Addendum, is used to add, remove, or modify the terms of a Partnership Agreement. It’s usually attached to the back of the amended Partnership Agreement, so the changes are readily available for anyone to read.
When is a Partnership Amendment used?
A Partnership Amendment is used when the partners need to modify their existing Partnership Agreement.
Some situations that can require a Partnership Amendment include the following:
- A new person or entity joins the partnership
- An existing partner leaves the business
- Profit and loss distribution changes
- The partnership adopts new accounting policies
- Changes in the capital contributions by one or more partners
What if there have been previous amendments to the Partnership Agreement?
If this isn’t the first time you’re amending your Partnership Agreement, you can attach the most recent Partnership Amendment to the back of the agreement with the previous amendments.
It’s a good idea to keep the amendments in order from newest to oldest because if there have been multiple changes to the same clause, the most recent amendment to the clause will be the one in effect.
If you’re making significant changes to your agreement or already have several Partnership Amendments attached to your agreement, you might want to consider drafting a whole new Partnership Agreement to reduce the risk of any confusion about the partnership’s terms.
How do I create a Partnership Amendment?
You can create a customised Partnership Amendment using LawDepot’s questionnaire. Our template ensures you complete all the necessary steps.
Step 1: State whether this is the first time amending the Partnership Agreement
Start your Partnership Amendment by stating whether the partners have previously amended their Partnership Agreement. If they have, also include how many times the partnership has amended it.
If you’ve made amendments on more than five occasions, you might want to consider creating a new Partnership Agreement.
Step 2: Provide your location
Each state and territory has its own partnership act. Provide your company’s location, and LawDepot will customise your Partnership Amendment to its governing laws.
The partnership acts applicable in each state and territory are linked below:
Step 3: Include details about the partnership
You need to provide basic information about your partnership, so there’s no confusion over which agreement you’re amending. Include details such as:
- The partnership’s name
- The partnership’s address
- The purpose of the partnership
- When the partnership started
Step 4: Include details about each partner
Your Partnership Amendment needs to include details about each partner, such as:
- Whether they’re an individual or business entity
- Their name
- Their address
A partner can be a person (individual), a company, a trust or another partnership.
Step 5: Write the amendment(s)
State which clauses the partners are amending and how they’re being modified.
Here are some tips for writing the amendments:
- Make your clauses no more than one paragraph long. Add another clause if you need a second paragraph.
- Identify any defined terms in the Partnership Agreement and use them consistently in the amending clauses.
- Use the clause number or section heading in the Partnership Agreement to identify which clause you’re amending.
- Don’t use personal pronouns (e.g., we, you, they, our etc.) because their meaning can be unclear. Use defined terms when referring to specific parties.
Step 6: Write additional clauses
If you want to amend your Partnership Agreement by adding whole new clauses rather than changing existing clauses, you can write them into your Partnership Amendment document.
Step 7: Sign the document
The final step is having all the partners sign the Partnership Amendment to bring the changes to the Partnership Agreement into effect.