The Partnership Agreement for a Nevada LLP

A partnership agreement is the internal contract among the partners of an LLP. It's the LLP equivalent of an LLC's operating agreement — different name, same job: it governs how the firm runs, how the money works, and how disputes and departures are handled. Nevada does not require you to file it with the Secretary of State, and it never becomes public. But it is the most important document your firm has after the state registration.

Registration versus agreement — two different things

It's worth being precise, because the two are easy to conflate. The LLP registration you file with the state is what gives the firm its liability shield — it's what distinguishes your firm from a plain general partnership. The partnership agreement is the private contract among partners that governs the firm's internal life. You need both: registration for the shield, agreement for the operation. One without the other leaves a gap — a registered LLP with no agreement runs on Nevada's default rules; an agreement with no registration is just a general partnership with unlimited liability.

Why "we trust each other" isn't enough

Partners who get along don't think they need a written agreement — until money is tight, a partner wants out, or someone dies or becomes disabled. The agreement exists for the hard moments, not the easy ones. Writing it while everyone is friendly and aligned is exactly when you get fair, sensible terms; writing it during a dispute is when you get a lawsuit.

A thorough partnership agreement addresses the questions that predictably cause conflict. At a minimum, cover these.

Money

• Capital contributions — what each partner put in at the start, and whether partners can be required to contribute more later.
• Profit, loss, and draws — how the firm's economics are split. This need not match ownership percentages, and in professional firms it's often based on billings, seniority, or a points system rather than equal shares.
• Distributions — when and how cash is paid out, and what's held back for the firm's needs.
• Partner compensation — whether partners take a guaranteed payment, a draw against profits, or some combination.

Management and decisions

• Who manages the firm day to day, and what authority each partner has to bind the firm.
• Voting — which decisions need unanimity, which need a majority, and how votes are weighted.
• Major decisions — admitting a partner, taking on significant debt, selling the practice, or dissolving usually deserve a higher threshold than routine matters.

People changes

• Admitting a new partner — the process and the vote required.
• A partner leaving — voluntary withdrawal, retirement, expulsion for cause, and what triggers each.
• Buyout terms — how a departing partner's interest is valued and paid, which is the provision that prevents the most litigation.
• Death or disability — what happens to a partner's interest and how the firm continues.

Ending the firm

• Dissolution — the circumstances that wind the firm up and how assets are distributed.
• Dispute resolution — mediation or arbitration clauses that keep disagreements out of court where possible.

Because an LLP is specifically about liability, the agreement should reflect and reinforce the shield rather than undercut it.

Reinforcing the shield

The LLP registration is what protects each partner from personal liability for a co-partner's wrongful acts and the general debts of the firm. The partnership agreement supports that protection by making the firm behave like a genuine, separate business: it establishes that the firm holds its own accounts, that partners don't casually commingle personal and firm funds, and that decisions follow a defined process. A firm that operates sloppily — mixing money, ignoring its own governance — gives an opponent material to argue the entity shouldn't be respected.

What the agreement can't do

The agreement can't expand the shield beyond what the LLP form provides. It can't relieve a partner of responsibility for their own negligence or misconduct — that liability is personal and stays personal regardless of what the partners write. Nor can it protect a partner who personally guarantees a firm debt; a personal guarantee is a personal obligation. Be realistic about this when drafting: the agreement allocates responsibility among partners, but it doesn't rewrite the law on personal accountability.

Indemnification among partners

A common and sensible provision is indemnification — the firm agreeing to cover partners for liabilities properly incurred on the firm's behalf, and partners agreeing on how losses from one partner's misconduct are borne internally. This doesn't change what an outside claimant can pursue, but it sets the rules among the partners for who ultimately bears a given cost.

Getting it drafted

For a two-person firm with simple economics, a well-structured template can be a reasonable starting point. For anything more — uneven contributions, complex profit splits, professional-practice rules, or real assets at stake — have a Nevada attorney draft or review it. The buyout and departure provisions in particular reward careful drafting, because they're the ones that get litigated. As a filing service, we prepare the state registration but don't draft the economic terms of your agreement; that's attorney work.

Signing

Every partner signs. Keep a fully executed copy with the firm's records, and give each partner a copy. Many banks ask to see the partnership agreement when you open the firm's account, so have it ready alongside the registration and EIN.

Keeping it current

The agreement isn't a one-time document. Revisit it when:

• A partner joins or leaves.
• The profit split or contribution structure changes.
• The firm takes on a new line of business or significant new risk.
• The partners' circumstances change enough that the old terms no longer fit.

An outdated agreement that no longer matches how the firm actually operates can be worse than none, because it creates a written record that contradicts reality. Update it deliberately, with all partners signing off, so it stays an accurate map of how the firm runs.