Free Individuals & Personal generator
Simple Partnership & Co-Ownership Agreement
A straightforward agreement for two or more people who go in together on a business, a piece of property, or a shared asset. It spells out shares, money, decisions, and exits.
What is a Simple Partnership & Co-Ownership Agreement?
A Simple Partnership & Co-Ownership Agreement is a straightforward agreement for two or more people who go in together on a business, a piece of property, or a shared asset. It spells out shares, money, decisions, and exits.
Friends starting a side business, siblings inheriting a property together, or partners buying an asset jointly who want ownership shares, profit splits, and an exit plan on paper before things get complicated.
Simple Partnership & Co-Ownership Agreement template, current for 2026
One document flexes between a business partnership and passive co-ownership (e.g. a shared property or asset). It carries buy-sell and right-of-first-refusal exit mechanics, deadlock resolution, capital-account and contribution tracking, a note steering you toward an LLC for liability protection, and e-signature and modern notice provisions.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your Simple Partnership & Co-Ownership Agreement as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- What are you going in on together? This sets the whole tone of the agreement: an operating business, a piece of real estate, or another shared asset each need different governance and exit terms.
- What will you call this venture, property, or asset? A plain label so the document refers to the shared thing consistently throughout.
- In a few sentences, describe the venture and what you're trying to accomplish together. This becomes the 'Purpose' section and frames the scope: what the money and effort are for, and what is out of bounds.
- Will you form a legal entity (like an LLC), or just co-own as individuals? An entity gives liability protection and a formal owner ledger; co-owning as individuals is simpler but exposes each of you personally.
- What is the entity's name? Used to name the entity that holds the venture and enters contracts.
- What type of entity is it (or will it be)? Determines the default legal backdrop and how ownership interests are labeled.
- In which U.S. state is / will the entity be organized? Entity governance follows the law of the state of formation.
- How many owners (partners / co-owners) are there? Tells the document how many owner blocks to build. Pick the exact number; you will then enter each owner's details.
- Owner 1: legal name and details The first owner's full legal name and mailing address. If the owner is an entity, use its exact registered name and the signatory who will sign.
- Owner 1: ownership percentage This owner's share of the venture, as a number without the percent sign. All owners together should total 100.
- Owner 1: initial capital contribution The money or property value this owner is putting in at the start. Include the dollar sign or a brief description of contributed property.
- Owner 1: email for notices (optional) Used for the notices provision and Schedule A. Leave blank to omit.
- Owner 2: legal name and details The second owner's full legal name and mailing address.
- Owner 2: ownership percentage This owner's share, as a number without the percent sign.
- Owner 2: initial capital contribution The money or property value this owner is putting in at the start.
- Owner 2: email for notices (optional) Used for notices and Schedule A. Leave blank to omit.
- Owner 3: legal name and details The third owner's full legal name and mailing address.
- Owner 3: ownership percentage This owner's share, as a number without the percent sign.
- Owner 3: initial capital contribution The money or property value this owner is putting in at the start.
- Owner 3: email for notices (optional) Used for notices and Schedule A. Leave blank to omit.
- Owner 4: legal name and details The fourth owner's full legal name and mailing address.
- Owner 4: ownership percentage This owner's share, as a number without the percent sign.
- Owner 4: initial capital contribution The money or property value this owner is putting in at the start.
- Owner 4: email for notices (optional) Used for notices and Schedule A. Leave blank to omit.
- Owner 5: legal name and details The fifth owner's full legal name and mailing address.
- Owner 5: ownership percentage This owner's share, as a number without the percent sign.
- Owner 5: initial capital contribution The money or property value this owner is putting in at the start.
- Owner 5: email for notices (optional) Used for notices and Schedule A. Leave blank to omit.
- Owner 6: legal name and details The sixth owner's full legal name and mailing address.
- Owner 6: ownership percentage This owner's share, as a number without the percent sign.
- Owner 6: initial capital contribution The money or property value this owner is putting in at the start.
- Owner 6: email for notices (optional) Used for notices and Schedule A. Leave blank to omit.
- What is the effective date of this agreement? The date the arrangement legally begins. Often the signing date or the day you first put money in.
- How are ownership shares determined? Shares drive who owns what, how profits split, and voting weight. This tells the reader the logic behind the percentages you entered.
- What is the total initial capital or purchase price going in? The combined starting money or value of the venture/property/asset. Used to describe total capitalization.
- If more money is needed later, how is it handled? Capital calls are a top source of partner disputes. This sets the rule before there's a crisis.
- If someone can't or won't fund an approved capital call, what happens? Defines the consequence of not keeping up: the fair mechanic that protects those who do contribute.
- How are profits and losses shared? The economic heart of the deal. Usually tracks ownership, but you can choose otherwise.
- Describe your custom profit/loss arrangement. Captures a waterfall, preferred return, or any non-standard split so the document reflects your real deal.
- How often will you distribute cash to owners? Tells everyone when to expect money out, versus reinvesting it in the venture.
- What distribution schedule? The specific cadence, so distributions aren't left vague.
- Will owners also work in the venture day-to-day? Sweat equity and unequal effort cause friction. This clarifies who does what and whether work is separately paid.
- Describe each owner's role, responsibilities, and any salary or fee for their work. Sets expectations for effort and separates compensation-for-work from profit-as-owner.
- How are ordinary decisions made? Day-to-day governance. Prevents deadlock and clarifies who can act without a full meeting.
- Who is the designated manager? Names the person authorized to run day-to-day operations.
- Which decisions should require heightened (unanimous or supermajority) approval? 'Major decisions' are the guardrails: the big moves no one should be able to make alone. Pick the ones that matter here.
- What approval level do major decisions require? How high the bar sits for the big moves you selected. If you skip this, the document defaults to unanimous.
- Above what dollar amount does a single expenditure need major-decision approval? Sets the ceiling on what one person can spend without sign-off.
- Can an owner sell or transfer their share to an outsider? Controls who you might end up in business with. Most co-owners want a say before a stranger buys in.
- How many days do the other owners have to exercise their right to buy? The window to match an offer before the share can go to an outsider.
- On a sale of the whole venture, should drag-along and tag-along rights apply? Drag-along lets an approving majority compel the minority to join a sale of the entire venture so a buyer can get 100%. Tag-along lets a minority owner join a sale on the same terms so they are not left behind. Both are standard in sophisticated co-ownership deals.
- If an owner wants out (or must leave), how is their share bought out? The exit ramp. Deciding the valuation method now avoids a fight when emotions run high later.
- Describe the buyout formula or fixed price. Spells out exactly how the exit price is computed.
- How is a buyout paid? A lump-sum buyout can strain the venture's cash. Installments protect the business while still paying the departing owner.
- Over how many years are installment payments made? The payout period for an installment buyout.
- What interest rate should apply to owner loans and installment buyouts? A named benchmark is far more enforceable and predictable than 'a commercially reasonable rate.' Prime plus a margin tracks market cost of capital; the AFR is the IRS minimum that avoids imputed-interest tax problems on related-party loans.
- Which events should trigger a mandatory buyout or right to buy out an owner? Life happens. These 'buy-sell' triggers let the remaining owners cleanly buy out a share when someone dies, divorces, or defaults, instead of inheriting a co-owner's spouse or creditor.
- After how many consecutive days of disability should the buy-sell trigger? A clear threshold avoids fights over what 'disabled' means. 180 consecutive days, certified by a physician, is a common and defensible standard.
- Fund the death buy-out with life insurance? Life insurance gives the venture or the surviving owners the cash to buy out a deceased owner's share without draining the business or forcing a fire sale. Strongly recommended wherever a death trigger applies.
- How should the life-insurance buy-sell be structured? Under a cross-purchase structure, each owner owns and pays for a policy on the others and buys the deceased's share directly, which often gives a better tax basis but means many policies for many owners. Under a redemption or entity structure, the venture owns the policies and buys back the share, which is simpler with more owners.
- If the owners hit an unbreakable deadlock, how is it resolved? For 50/50 or evenly-split ventures especially, a deadlock-breaker prevents paralysis or a forced court fight.
- Should owners be restricted from competing with the venture? Protects the shared enterprise from an owner setting up a rival or poaching customers. Enforceability of true non-competes is narrowing fast under 2026 federal and state law, so the document steps a banned non-compete down to a non-solicit automatically.
- For how long after leaving should the non-compete last? The tail period after an owner exits. Keep it reasonable (one to three years) for enforceability.
- What geographic area should the non-compete cover? A non-compete must be limited to where the venture actually competes. Describe the market area.
- How should the owners' duty of loyalty and outside business opportunities be handled? By default partners owe each other a fiduciary duty of loyalty, including offering business opportunities to the venture first. If owners have other ventures, you can waive the corporate-opportunity doctrine so they are free to pursue outside deals. This ties to the non-compete answer.
- How are shared expenses, debts, and liabilities allocated? Clarifies who bears costs and losses once the initial money is spent, a common source of resentment if left unsaid.
- Will you keep formal books and give owners access? Transparency builds trust. This sets the recordkeeping and inspection rights.
- How should the venture be treated for taxes? Drives how income flows to your personal returns. Most co-ownerships are pass-through, but confirm with a tax advisor.
- How should disputes under this agreement be resolved? Sets the forum before a conflict arises: often faster and more private than court.
- Which arbitration administrator and rules should govern? Naming a real administrator and ruleset makes the clause enforceable and predictable. AAA and JAMS are the two leading U.S. commercial arbitration bodies.
- In which city should the arbitration be seated? The seat (legal place) of arbitration fixes where hearings occur and which courts supervise the award.
- Should married owners' spouses sign a consent? In community-property states a spouse may have a claim to an owner's interest. A spousal consent binds the spouse to the transfer and buy-sell terms and keeps the interest out of a divorce or estate fight. Recommended if any owner is married or lives in a community-property state.
- For a property or asset venture, how is legal title held? How co-owners hold title changes survivorship and partition rights. Tenants in common each own a transferable share (no survivorship). Joint tenants with right of survivorship pass automatically to the survivors. If an entity holds title, the entity is the record owner.
- Which state's law governs this agreement? The law used to interpret the agreement and, usually, the venue for disputes.
- How long does this arrangement last? Some ventures are open-ended; others have a natural end (a project, a hold period). Sets when things wind down.
- When or on what milestone does it end? Defines the endpoint so wind-up is unambiguous.
- Include an independent-counsel acknowledgment? A clause confirming each owner had the chance to consult their own lawyer and is not relying on anyone else's. It strengthens enforceability and reduces later 'I didn't understand it' claims, especially among friends or family.
- Any other terms, side agreements, or special understandings to include? A catch-all so anything specific to your deal makes it into the final document.
Frequently asked
About the Simple Partnership & Co-Ownership Agreement and how HDAi works.
What is a Simple Partnership & Co-Ownership Agreement? +
A Simple Partnership & Co-Ownership Agreement is a straightforward agreement for two or more people who go in together on a business, a piece of property, or a shared asset. It spells out shares, money, decisions, and exits. Friends starting a side business, siblings inheriting a property together, and partners buying an asset jointly use it to put ownership shares, profit splits, and an exit plan on paper before things get complicated.
Is HDAi's Simple Partnership & Co-Ownership Agreement legally binding? +
The Simple Partnership & Co-Ownership Agreement HDAi generates is a professionally drafted document that becomes binding once it is completed, reviewed, and properly signed. If you want a licensed Hart David Carson attorney to finish it, book a planning call. The firm's flat-fee packages, the Illinois Family Plan and Company Launch, cover the most common needs; for any other draft, an Illinois attorney will tell you on the call what finishing it would involve.
Do I need a lawyer to use this Simple Partnership & Co-Ownership Agreement? +
You can generate and download the Simple Partnership & Co-Ownership Agreement in minutes, free of charge. A licensed Hart David Carson attorney can then review the buyout terms, the capital-call rules, and the entity question against your state before anyone signs, which no template can do.
What makes this Simple Partnership & Co-Ownership Agreement current for 2026? +
One document flexes between a business partnership and passive co-ownership (e.g. a shared property or asset). It carries buy-sell and right-of-first-refusal exit mechanics, deadlock resolution, capital-account and contribution tracking, a note steering you toward an LLC for liability protection, and e-signature and modern notice provisions.
How long does the Simple Partnership & Co-Ownership Agreement take? +
Estimated time about 39 min (78 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this Simple Partnership & Co-Ownership Agreement work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
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