What Can be Amended in a Partnership Agreement?
- Adding or removing a partner
- Capital contributions
- Ownership interest or voting power
- Profit and loss allocation
- Partnership name or address
1. Adding or removing a partner
Partnership changes may occur due to unforeseen circumstances, such as a death or big life changes, or for more strategic reasons, such as professional compatibility. Whatever the reason for adding or removing a partner, a partnership amendment can be used to reflect the new lineup of partners involved in the partnership.
2. Capital contributions
Capital contributions include the money, assets, or property that each partner agrees to contribute to the partnership, as either an initial contribution at the start of the business or as an ongoing responsibility as needed.[1] This may change over time due to a change in the financial circumstances of the partnership or an individual partner.
3. Ownership interest or voting power
Ownership interest reflects each partner’s share of ownership in the partnership, typically affecting their voting power, entitlement to profits, and more. Changes may need to be made to ownership interest or voting power due to changes in partnership structure, reduced or increased involvement, and more.
4. Profit and loss allocation
Profit and loss allocation refers to how much each partner will receive or absorb the partnership’s profits and losses. Percentages are typically allocated in the original partnership agreement and may be subject to change over time, due to renegotiations, changes in capital contributions, new partners entering the partnership, and more.
Does It Need to be Filed with the State?
This largely depends on the type of partnership,[2] what state it is operating in, and what type of changes are being made.
A general rule of thumb to follow: If the amendment makes changes to information that was registered publicly with the state[3] — such as partnership name, registered agent, principal office address, or changes in partners — it should be filed with the state to update this information publicly.
This means that changes to internal agreement terms, such as profit split, management roles, and ownership interest, usually do not need filing.