A civil partnership agreement is a document containing the arrangements and rules of cooperation between at least two people (called partners) for the purpose of running a business. A civil partnership (spółka cywilna) is one of the legal forms of doing business, and the civil partnership agreement is its basic founding document.
Key elements of a civil partnership agreement
Here are the key elements of a civil partnership agreement:
- Partners' details – the agreement contains information about all the partners, including their names, residential addresses and shares in the partnership's profits and losses.
- Business activity – a definition of the scope of activity the partnership will carry out, i.e. the type of services it will provide or products it will make.
- Partners' contributions – the agreement specifies what contributions each partner makes to the partnership in the form of money, property or work.
- Distribution of profits and losses – rules for sharing profits and losses between the partners, usually in proportion to their shares in the partnership.
- Management rules – the agreement may include rules for managing the partnership, including how decisions are taken, the scope of each partner's powers and how the partnership is represented.
- Partners' liability – rules on the partners' liability for the partnership's obligations, both towards creditors and towards each other.
A civil partnership agreement can be flexibly adapted to the needs and preferences of the partners, provided it does not violate the law. It is a popular form of business for small and medium-sized enterprises, in which the partners can flexibly regulate their mutual relations and obligations.
When is a civil partnership agreement drawn up?
A civil partnership agreement is drawn up when the partnership is founded, i.e. when at least two people decide to run a business together. It is the basic founding document of a civil partnership, setting out the rules of cooperation between the partners and how the partnership operates.
A civil partnership agreement is drawn up in the following situations:
- Founding a new partnership – when two or more people decide to start a new business together, they draw up a civil partnership agreement setting out the rules of cooperation and operation of the partnership.
- Admission of a new partner – if an existing civil partnership decides to admit a new partner, the agreement may be amended to reflect the new terms of cooperation and the new partner's share in profits and losses.
- Modifying an existing agreement – an existing civil partnership agreement may be modified and supplemented as needed, for example when the business activity, the division of shares or other important matters change.
- Ending cooperation – a civil partnership agreement may also be drawn up when cooperation between the partners ends, in order to settle the terms of dissolving the partnership and dividing its assets and liabilities.
Drawing up a civil partnership agreement is an important step in setting up a business and is necessary to regulate the rules of cooperation between the partners and ensure the stability and transparency of the partnership's operation. It is worth preparing such an agreement together with an office providing accounting services, where experienced professionals will take care of all the formalities and prepare a professional civil partnership agreement.
Who resolves disputes concerning civil partnership agreements?
Disputes concerning civil partnership agreements can be resolved in various ways, depending on the nature of the dispute, the provisions of the agreement and the partners' preferences. Below we describe several possible ways of resolving such disputes:
- Mediation – the partners may opt for mediation, an out-of-court way of resolving disputes in which a mediator helps the parties reach an agreement. Mediation can be an effective way of resolving disputes amicably without involving the court.
- Arbitration – the parties may opt for arbitration, i.e. resolution of the dispute by an independent arbitrator or panel of arbitrators who decide the dispute on the basis of the evidence and arguments presented. The arbitration award is final and binding on the parties.
- Common court – if the parties cannot reach an agreement through mediation or arbitration, the dispute may be resolved by a common court. The court then decides the case on the basis of the law and the evidence and statements presented by the parties.
- Amicable settlement – the parties may also decide to settle the dispute amicably, i.e. negotiate themselves and agree on terms without involving a mediator, arbitrator or court.
Many civil partnership agreements contain arbitration clauses or dispute resolution provisions that specify how any conflicts between the partners are to be resolved. If the agreement contains no such provisions, the parties may choose various ways of resolving disputes according to their own preferences and possibilities.
