The Partnership Agreement for a New Hampshire LLP

New Hampshire doesn't require you to file a partnership agreement, and it never becomes public. But operating without one is one of the riskiest things a partnership can do. The agreement is where the partners set the rules of their own relationship — and if they don't, the state's default rules step in.

The default rules fill every gap

When there's no written partnership agreement, New Hampshire's Uniform Partnership Act (RSA 304-A) supplies default provisions for almost everything: how profits and losses are shared, how decisions are made, how partners are admitted or removed, and what happens when a partner leaves or dies. Those defaults are reasonable starting points, but they frequently don't match what partners actually want. For instance, the default might split profits equally when the partners intended a split based on contribution or seniority. The only way to override a default you don't like is to write your own term.

The agreement protects the partners from each other

Most partnership disputes come down to something the partners never wrote down. A clear agreement is what you point to when there's disagreement over money, authority, or a departing partner's buyout. It converts vague understandings into enforceable terms, which is exactly what you want before a disagreement turns into a lawsuit that could damage the firm.

It reinforces the separateness of the entity

Running the LLP by a real, written agreement — holding to its terms, documenting decisions, keeping partnership finances separate — is part of treating the partnership as a genuine separate business. That discipline is what keeps the liability shield sturdy.

This is the point that matters most for an LLP, and it's what distinguishes the LLP from a plain general partnership. The two work together but do different jobs, and it helps to be precise about which does what.

The shield comes from the state registration, not the agreement

An LLP's liability shield — the protection that keeps an innocent partner from being personally liable for another partner's negligence or malpractice — comes from filing the Statement of Qualification with New Hampshire and maintaining LLP status. That's a matter of public record and state law. The partnership agreement is a private contract among the partners; it can't create the shield, and it can't expand the shield beyond what the statute grants.

What the agreement does around the shield

While the agreement doesn't create the shield, it governs everything the shield doesn't touch:

• How the partners handle liability among themselves. The agreement can set out indemnification — when the firm or the other partners will cover a partner, and when a partner who caused a problem bears it alone.
• Insurance expectations. It can require the firm and the partners to carry professional-liability coverage, which works alongside the shield to manage real-world risk.
• What conduct is expected. By defining each partner's authority and duties, the agreement reduces the chance of the kind of conduct that leads to claims in the first place.

General partnership versus LLP, in practice

Two firms can have nearly identical partnership agreements; the one that has filed for LLP status gives its innocent partners a shield against a colleague's wrongful acts, and the one that hasn't doesn't. The agreement organizes the business; the LLP registration adds the protection. You want both.

A thorough partnership agreement anticipates the situations that strain a partnership before they happen. Here's what a complete one addresses.

Core economic and governance terms

• Capital contributions. What each partner contributed at the outset and what future contributions may be required.
• Profit and loss sharing. How income and losses are allocated — equal, by ownership percentage, by contribution, or some formula the partners choose.
• Draws and distributions. When and how partners take money out of the firm.
• Management and decision-making. Who has authority over what, and which decisions require a majority or unanimous vote.
• Voting rights. Whether votes are per capita, weighted by interest, or a mix.

Change and exit provisions

• Admitting new partners. The process and terms for bringing someone in.
• Withdrawal, retirement, and expulsion. How a partner exits and on what terms.
• Buyout and valuation. What happens to a departing partner's interest on withdrawal, retirement, death, or disability, and how it's valued — often the single most litigated gap when it's missing.
• Dispute resolution. How disagreements are handled, whether by mediation, arbitration, or a defined internal process.
• Dissolution. The circumstances under which the firm winds up and how remaining assets are distributed.

Because LLPs are so common among licensed professionals, a professional firm's partnership agreement usually has to address a few things a general business agreement wouldn't.

Practice-specific terms

• Licensing and eligibility. The agreement may require that partners hold and maintain the relevant professional license, and address what happens if a partner's license is suspended or revoked.
• Client relationships and files. For a professional practice, spell out who owns client relationships and how files and clients are handled when a partner departs — subject to the ethical rules of the profession.
• Non-solicitation and restrictive terms. Within the limits your profession's ethics rules allow, the agreement can address how a departing partner may or may not compete or solicit.
• Malpractice allocation. Because the LLP shield protects innocent partners from a colleague's malpractice, the agreement often addresses indemnification and insurance so the internal allocation of that risk is clear.
• Board and regulatory requirements. Some licensing boards impose their own rules on how professional firms are organized, named, and owned. The agreement should be drafted to fit those requirements.

Keep it current

A partnership agreement isn't a document you sign once and forget. Revisit it when partners join or leave, when the economics of the firm change, or when the law changes. An out-of-date agreement can be as much of a problem as no agreement at all.

How Mainstay Filing fits in

Mainstay Filing handles the state-facing work — filing your Statement of Qualification and serving as your registered agent — that establishes and maintains the LLP status your partnership agreement relies on. We don't draft the agreement or advise on its economic and professional terms; that's work for a New Hampshire attorney who can tailor it to your firm and your profession. But we make sure the LLP registration underneath it is filed correctly and kept in good standing, so the shield your agreement is built around stays in place.