General Partnership Agreement3 - Free Download | Page 6
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LOMAS Administrative Form
Form No.09689, page 6 of 16
B. Losses. All losses which shall occur in the operation of said business shall first be
paid out of the income of the partnership, if any, and then operating capital of the partnership, or
if the same shall be deficient, by each partner in the same proportion as such partner's appropriate
share in partnership profits.
C. Allocation for Tax Purposes. For purposes of this agreement and for federal, state
and local income tax purposes, income, deductions, losses and credit to the partnership shall be
allocated equally among the partners who are partners on the last day of the fiscal year; provided,
however, that in the event of a transfer of interest or the admission or withdrawal of a partner
during the fiscal year, then such allocation shall be made on a pro rata basis in accordance with the
varying interest of such parties during the fiscal year of the partnership.
D. Distributions. The making and time of partnership distributions shall be in
accordance with the terms and conditions as may be agreed upon by the partners provided the
partnership shall have retained such funds as necessary to cover its reasonable business needs
which shall include reserves against possible losses and the payment or making provision for the
payment, when due, of all obligations of the partnership including loans from the partners. In the
event cash flows do not permit all profits to be distributed currently, the partnership may
determine by vote to transfer all or part of such income of the undistributed profits from the
partners' income accounts to their capital accounts; provided, however, that no such transfer to
the capital accounts shall be made other than equally to all the partners without the unanimous
consent of all the partners. Any profits not distributed because of insufficient cash flows or not
transferred to capital accounts of the partners, shall remain in the partners' income accounts as
undistributed profits and shall be entitled to priority of distribution before distribution of any
profits in subsequent fiscal years.
Books of Account; Annual Accounting
A. Books of Account; Accounting Method. Books of account shall be kept by the
partners, and proper entries made therein of all the business, sales, purchases, receipts, payments,
engagements, transactions, and property of the partnership. The partnership shall, in keeping such
accounting records, report is income for income tax purposes on the case basis method of
accounting. The accounting for the partnership shall be in accordance with generally accepted
accounting principles, as applied to cash basis account methods.
B. Place Where Books and Records to be Kept. The said books of account, and all
securities, papers, and writings of the partnership shall be kept at the principal place of business as
described in Article III hereof, or in such other place where the business shall be carried on, and
each partner shall have free access at all times to examine and copy the same.
C. Fiscal Year. Both for purposes of partnership accounting and income tax
reporting, the partnership adopts a fiscal year ending on the _____ day of _______ of each year.