[{"data":1,"prerenderedAt":526},["ShallowReactive",2],{"document-passive-real-estate-partnership-agreement-D13232":3},{"document":4,"label":23,"preview":11,"thumb":24,"thumb600":25,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":26,"breadcrumb":30,"related":36,"customDescModule":177,"customdescription":6,"mdFm":178,"mdProseHtml":525},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"REAL ESTATE PARTNERSHIP AGREEMENT (PASSIVE) This Real Estate Partnership Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [INVESTOR NAME], (the \"Investor\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [OWNER NAME], (the \"Owner\"), an individual with his main address located at: [COMPLETE ADDRESS] Collectively, the Investor and Owner shall be referred to as the \"Partners.\" WHEREAS, the Owner has real estate property located at [ADDRESS OF PROPERTY] (\"Property\") which is intended to be renovated and sold under this partnership; WHEREAS, the Investor intends to contribute investment capital to the partnership. NOW, THEREFORE, the Partners agree as follows: PURPOSE The purpose of the partnership is to renovate, repair, and sell the Property as expeditiously as possible and to conduct such other activities necessary to accomplish the purpose of this Agreement. FORMATION The Partners hereby develop a Real Estate Partnership Agreement pursuant to the laws of [STATE/PROVINCE]. The said partnership shall be described exclusively by this Agreement, regardless of the way title to Property may be taken. This Agreement shall not be construed as a general partnership between the Partners. TERM The partnership shall begin as of the date of this Agreement and shall be in effect until terminated by mutual consent or when the sales proceeds of the Property are distributed pursuant to the stated provisions, subsequent to the closing of the sale of the Property. CONTRIBUTION OF CAPITAL The Investor shall contribute all money needed to qualify for any financing, renovation and repair of the Property and incur all the expenses for the sale of the Property. NATURE OF PERFORMANCE The Partners shall be solely responsible for the performance and execution of the responsibilities mutually agreed upon. The Investor shall contribute all money required to manage, promote, market, and any other expenses and mortgage payments during the period of ownership of the subject Property and qualify for any financing. The Owner shall be exclusively responsible for the everyday management, renovation, and marketing of the subject Property for resale, thereby protecting the investments for both Partners. PARTNERSHIP DECISIONS All decisions, including but not limited to the purchase of assets by the partnership, any loan or other obligation to be undertaken by the partnership, and the sale of any asset of the partnership shall require the approval of all of the Partners involved in this Agreement. PROFIT AND LOSS Subject to the other provisions of this Agreement, the net profits and losses of the partnership after calculating all the expenses of the sales of the Property, for both accounting and tax purposes, shall accrue to and be borne by the Partners according to the following schedule: S.NO NAME OF PARTNER PROFIT AND LOSS SHARE 1. [NAME OF INVESTOR] (INVESTOR) [PERCENTAGE]% 2. [NAME OF OWNER] (OWNER) [PERCENTAGE]% LANGUAGE OF THE CONTRACT The language of the Agreement shall be the English Language, which shall be the binding and controlling language for all matters relating to the meaning or interpretation of the Agreement. SEVERABILITY If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the Partners' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable, and the remainder of the provisions of this Agreement shall in no way be affected, impaired or invalidated as a result. 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WITNESSETH: WHEREAS, the parties are desirous of forming a Joint Venture (the \"Venture\"), under the laws of the [State/Province] of [STATE/PROVINCE] by execution of this Agreement for the purposes set forth herein and are desirous of fixing and defining between themselves their respective responsibilities, interests, and liabilities in connection with the performance of the before mentioned project; and NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the Parties herein agree to constitute themselves as Joint Venturers, henceforth, \"Venturers\" for the purposes before mentioned, and intending to be legally bound hereby, the parties hereto, after first being duly sworn, do covenant, agree and certify as follows: DEFINITIONS \"Affiliate\" shall refer to (i) any person directly or indirectly controlling, controlled by or under common control with another person, (ii) any person owning or controlling 10% or more of the outstanding voting securities of such other person, (iii) any officer, director or other partner of such person and (iv) if such other person is an officer, director, joint Venturer or partner, any business or entity for which such person acts in any such capacity. \"Venturers\" shall refer to [VENTURE NAME] Inc., and any successor(s) as may be designated and admitted to the Venture. \"Internal Revenue Code\", \"Code\" or \"I.R.C.\" shall refer to the current and applicable Internal Revenue Code. \"Net Profits and Net Losses\" means the taxable income and loss of the Venture, except as follows: [DESCRIBE] The \"Book\" value of an asset shall be substituted for its adjusted tax basis if the two differ, but otherwise Net Profits and Net Losses shall be determined in accordance with federal income tax principles. \"Project\" shall refer to that certain [DESCRIBE] project known as [NAME]. \"Treasury Regulations\" shall refer to those regulations promulgated by the Department of the Treasury with respect to certain provision of Internal Revenue Code. \"Percentage of Participation\" shall refer to that figure set forth in Exhibit A. FORMATION, NAME, AND PRINCIPLE PLACE OF BUSINESS Formation (a) The Venturers do hereby form a joint venture pursuant to the laws of the State of [STATE/PROVINCE] in order for the Venture to carry on the purposes for which provision is made herein. (b) The Ventures shall execute such certificates as may be required by the laws of the [State/Province] of [STATE/PROVINCE] or of any other state in order for the Venture to operate its business and shall do all other acts and things requisite for the continuation of the Venture as a joint venture pursuant to applicable law. Name The Name and style under which the Venture shall be conducted is: [DESCRIBE]. Principal place of business The Venture shall maintain its principal place of business at [FULL ADDRESS]. The Venture may re-locate its office from time to time or have additional offices as the Venturers may determine. PURPOSE OF THE JOINT VENTURE The business of the Venture shall be to perform: [DESCRIBE], a project having the Contract # , being entitled, and being in a dollar amount of [AMOUNT], in accordance with the contract documents for the Project and all such other business incidental to the general purposes herein set forth. TERM The term of the Venture shall commence as of the date hereof and shall be terminated and dissolved upon the earliest to occur of: (i) completion of the Project and receipt of all sums due the Venture by the Owner, [OWNER NAME] pursuant thereto and payment of all laborers and material men employed by the Venture in connection with the project; (ii) [DATE]; (iii) the unanimous agreement of the Ventures; or (iv) the order of a court of competent jurisdiction. PERCENTAGE OF PARTICIPATION Description Except as otherwise provided in sections 6.0 and 9.0 hereof, the interest of the Parties in any gross profits and their respective shares in any losses and/or liabilities that may result from the filing of a joint bid and/or the performance of the Construction Contract, and their interests in all property and equipment acquired and all money received in connection with the performance of the Contract shall be as follows: [Name Joint Venture Partner Percentage] Losses The Parties agree that in the event any losses arise out of or results from the performance of the Project, each Venturer shall assume and pay the share of the losses that is equal to the percentage of participation. Liabilities If for any reason, a Venturer sustains any liabilities or is required to pay any losses arising out of or directly connected with the Project, or the execution of any surety bonds or indemnity agreements in connection therewith, which are in excess of its Percentage of Participation, in the Joint Venture, the other Venturer shall promptly reimburse such Venturer this excess, so that each and every member of the Joint Venturer will then have paid its proportionate share of such losses to the full extent of its Percentage of Participation. Indemnities The Venturers agree to indemnify each other and to hold the other harmless from, any and all losses of the Joint Venture that are in excess of such other Venturer's Percentage of Participation. Provided that the provisions of this subsection shall be limited to losses that are directly connected with or arise out of the performance of the Project and/or the execution of any bonds or indemnity agreements in connection therewith and shall not be relate to or include any incidental, indirect or consequential losses that may be sustained or suffered by a Party. Duration The Parties shall from time to time execute such bonds and indemnity agreements, including applications there and other documents that may be necessary in connection with the performance of the Project. Provided however, that the liability of each of the Parties under any agreements to indemnify a surety company or surety companies shall be limited to the percentage of the total liability assumed by all the Parties under such indemnity agreements that is equal to the Party's Percentage of Participation. Initial contribution of the venture (a) The Venturers shall contribute the Property to the Venture and their Capital Account shall each be credited with the appropriate value of such contribution in accordance with their Venture interests. (b) Except as otherwise required by law or this Agreement, the Venturers shall not be required to make any further capital contributions to the Venture. Venture interests Upon execution of this Agreement, the Venturers shall each own the following interests in the Venture: Joint Venture Partner Percentage Return of capital contributions (a) No Venturer shall have the right to withdraw his capital contributions or demand or receive the return of his capital contributions or any part thereof, except as otherwise provided in this Agreement. (b) The Venturers shall not be personally liable for the return of capital contributions or any part thereof, except as otherwise provided in this Agreement. (c) The Venture shall not pay interest on capital contributions of any Venturer.","Joint Venture Agreement","7",70,"https://templates.business-in-a-box.com/imgs/1000px/joint-venture-agreement-D889.png","https://templates.business-in-a-box.com/imgs/250px/889.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#889.xml",{"title":6,"description":6},[94,96],{"label":18,"url":95},"business-legal-agreements",{"label":18,"url":95},"joint venture agreement","/template/joint-venture-agreement-D889",{"description":100,"descriptionCustom":6,"label":101,"pages":102,"size":103,"extension":10,"preview":104,"thumb":105,"svgFrame":106,"seoMetadata":107,"parents":108,"keywords":113,"url":114},"LIMITED LIABILITY COMPANY OPERATING AGREEMENT This Limited Liability Company Operating Agreement is entered into as of the [DATE], BETWEEN: [INDIVIDUAL NAMES] (the \"Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Non-Managing Members\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] The Managing Members and the Non-Managing Members are referred to herein collectively as the \"Members\". The Members have formed the Company by causing a Certificate of Formation (the \"Certificate\") conforming to the requirements of the [STATE] Revised Limited Liability Company Act (the \"Act\") to be filed in the Office of the Secretary of State for the State of [STATE]. NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY Name The name of the Company is [COMPANY NAME], LLC. The affairs of the Company shall be conducted under such name or such other name as the Managing Members may, in their discretion, determine. [COMPANY NAME] hereby grants the Company the right, at no cost, to use the [SPECIFY] name for the term of the Company as set forth in Article [SPECIFY] hereof. Agreement In consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may be amended from time to time. It is the express intention of the Members that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates matters by express reference, this Agreement shall govern even when inconsistent with or different from the provisions of the Act or any other provision of law. Purpose; Powers Purpose. The primary purpose of the Company is to act as the general partner of [COMPANY NAME] (the \"Fund\"). Powers. Subject to all of the terms and provisions hereof, the Company shall have all powers necessary, suitable or convenient for the accomplishment of the purpose of the Company, including, without limitation, the following: to purchase, sell, invest and trade in securities of every kind, including, without limitation, capital stock, limited partnership interests, bonds, notes, debentures, securities convertible into other securities, trust receipts and other obligations, instruments or evidences of indebtedness, as well as in rights, warrants and options to purchase securities; to make and perform all contracts and engage in all activities and transactions necessary or advisable to [SPECIFY] out the purposes of the Company, including, without limitation, the purchase, sale, transfer, pledge and exercise of all rights, privileges and incidents of ownership or possession with respect to any Company asset or liability; the borrowing or lending of money and the securing of payment of any Company obligation by hypothecation or pledge of, or grant of a security interest in, Company assets; and the guarantee of or becoming surety for the debts of others; and otherwise to have all the powers available to it as a limited liability company under the Act. Registered Office and Agent The initial address of the Company registered office in [STATE] is, and its initial agent at such address for service of process is Incorporating Services Limited. The Managing Members may change the registered office and agent for service of process as they from time to time may determine. Principal Office The principal office of the Company shall initially be located at [ADDRESS]. The Managing Members may change the location of the principal office of the Company at any time. Definitions Additional Members. This term shall have the meaning ascribed to it in Paragraph 3.2. Affiliate. With reference to any person, any other person controlling, controlled by or under direct or indirect common control with such person. Agreement. This Operating Agreement of [COMPANY NAME], a [STATE] limited liability company. Assignee. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Bankruptcy. A person or entity shall be deemed bankrupt if: any proceeding is commenced against such person or entity as debtor for any relief under bankruptcy or insolvency laws, or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions and such proceeding is not dismissed within [NUMBER] days after such proceeding has commenced, or such person or entity commences any proceeding for relief under bankruptcy or insolvency laws or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions. Book Value. This term shall have the meaning ascribed to it in Paragraph 6.2(a). Capital Account. This term shall have the meaning ascribed to it in Paragraph 6.2(b). Capital Commitment. This term shall have the meaning ascribed to it in Paragraph 5.1. Capital Contribution. This term shall have the meaning ascribed to it in Paragraph 5.1(b). [SPECIFY]. The Company [PERCENTAGE] carried interest in the income of the Fund. Certificate. The Certificate of Formation of [COMPANY NAME], a [STATE] limited liability company. Code. [SPECIFY YOUR COUNTRY INTERNAL REVENUE ACT/CODE/LAW], as amended from time to time (and any corresponding provisions of succeeding law). Defaulting Member. This term shall have the meaning ascribed to it in Paragraph 5.4(a). Fiscal Quarter. This term shall have the meaning ascribed to it in Paragraph 6.2(c). Fiscal Year. This term shall have the meaning ascribed to it in Paragraph 6.2(d). Management Fee. The management fee receivable by the Company from the Fund. Net Income or Net Loss. This term shall have the meaning ascribed to it in Paragraph 6.2(e). Percentage Interest. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Sale or Exchange. This term shall have the meaning ascribed to it in Paragraph [NUMBER]. Securities Act. [YOUR COUNTRY ACT/CODE/LAW] as amended from time to time. Securities. Securities of every kind and nature and rights and options with respect thereto, including stock, notes, bonds, debentures, evidences of indebtedness and other business interests of every type, including interests in partnerships, joint ventures, proprietorships and other business entities. TMP. This term shall have the meaning ascribed to it in Paragraph 13.16. Termination Date. This term shall have the meaning ascribed to it in Paragraph 2.1. Treasury Regulations. The Income Regulations promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). TERM AND TERMINATION OF THE COMPANY Term The term of the Company shall continue until [NUMBER] year after the dissolution of the Fund unless sooner terminated as provided in Paragraph 2.2 or by operation of law or extended as provided in Paragraph 2.3. The last day of the term of the Company, as such may be extended as provided herein, is referred to herein as the \"Termination Date.\" Termination The Company shall terminate prior to the end of the period specified in Paragraph 2.1 at the election of the Managing Members. The Managing Members shall deliver notice of such termination to the Non-Managing Members. Extension of Term The term of the Company may be extended by the Managing Members. The Managing Members shall provide notice of any such extension to the Non-Managing Members. INITIAL MEMBERS; CHANGES IN MEMBERSHIP Name and Address The persons listed on Exhibit A are hereby admitted as Members of the Company","LLC Operating Agreement","21",207,"https://templates.business-in-a-box.com/imgs/1000px/llc-operating-agreement-D5209.png","https://templates.business-in-a-box.com/imgs/250px/5209.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#5209.xml",{"title":6,"description":6},[109,110],{"label":18,"url":95},{"label":111,"url":112},"Incorporation Agreements","incorporation-agreement","llc operating agreement","/template/llc-operating-agreement-D5209",{"description":116,"descriptionCustom":6,"label":117,"pages":118,"size":9,"extension":10,"preview":119,"thumb":120,"svgFrame":121,"seoMetadata":122,"parents":124,"keywords":123,"url":129},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":123,"description":6},"non disclosure agreement nda",[125,126],{"label":18,"url":95},{"label":127,"url":128},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":131,"descriptionCustom":6,"label":132,"pages":118,"size":133,"extension":10,"preview":134,"thumb":135,"svgFrame":136,"seoMetadata":137,"parents":138,"keywords":148,"url":149},"PROMISSORY NOTE This Promissory Note (the \"Note\") is made and effective the [DATE], BETWEEN: [LENDER NAME] (the \"Lender\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Borrower\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] TERMS FOR VALUE RECEIVED, the Borrower promises to pay to the order of Lender, at its principal office located at [ADDRESS], or at such other place that is designated in writing by the holder hereof, the principal sum of [AMOUNT], together with all charges and interest herein provided, payable at the rate and in the manner hereinafter set forth: Borrower shall make monthly payments of principal and interest at the rate of [%] per annum based upon an amortization of [NUMBER] months. Monthly payments shall be due on or before the first day of each month with the first payment being due on or before [DATE]. If not sooner paid, all amounts due under this Note, including principal, interest and other charges shall be due and payable in full on or before the first day of [MONTH], [YEAR] (the \"Maturity Date\"). Time is of the essence of the payment obligations hereunder and each monthly payment shall be due and payable on or before the first day of each month. This Note is and will be secured by a certain first priority security interest in all of the tangible and intangible property of the Borrower, to be recorded in all applicable governmental offices. The parties shall execute a separate security agreement, in form and substance acceptable to the Lender in all respects. Borrower agrees to execute any such security agreements presented by the Lender or other documents required by the Lender in order to perfect its security interest in the above described property. Said Security Agreement and any other instruments and documents executed in connection with or given as security for this Note shall hereinafter be referred to collectively as the \"Loan Documents.\" All of the terms, covenants, Conditions, representations and warranties contained in the Loan Documents are hereby made part of this Note to the same extent and with the same force and effect as if fully set forth herein. If all or any portion of any payment due hereunder is not received by the Lender within [NUMBER] calendar days after the date when such payment is due, Borrower shall pay a late charge equal to [%] of such payment, such late charge to be immediately due and payable without demand by Lender. Borrower shall have the right to prepay all (but not a portion) of the indebtedness evidenced by this Note at any time, by paying the Lender an amount equal to the sum of (I) the principal balance then outstanding, (ii) all interest accrued to the date of such prepayment, (iii) all interest calculated through the Maturity Date, and (iv) any late charge or charges then due and owing. If any payment under this Note is not paid in full by the [DAY] of any month during the term hereof or if the entire amount due as represented by this Note is not paid in full on or before the Maturity Date, or should default be made in the performance or observation of any of the terms, covenants, or conditions contained in the Loan Documents, or if any representation or warranty contained in the Loan Documents is breached or is or becomes untrue, this Note shall be in default, and the entire principal amount outstanding hereunder, accrued interest thereon, all late charges, if any, and any and all other charges due hereunder, shall, at Lender's option, immediately become due and payable, without further notice, the giving of such notice being expressly waived by the Borrower","Promissory Note",39,"https://templates.business-in-a-box.com/imgs/1000px/promissory-note-D434.png","https://templates.business-in-a-box.com/imgs/250px/434.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#434.xml",{"title":6,"description":6},[139,142,145],{"label":140,"url":141},"Finance & Accounting","finance-accounting",{"label":143,"url":144},"Business Loans","business-loan",{"label":146,"url":147},"Promissory Notes","promisory-note","promissory note","/template/promissory-note-D434",{"description":151,"descriptionCustom":6,"label":152,"pages":153,"size":9,"extension":10,"preview":154,"thumb":155,"svgFrame":156,"seoMetadata":157,"parents":159,"keywords":158,"url":163},"PARTNERSHIP AGREEMENT This Partnership Agreement (\"Agreement\") is made and effective this [Date], BETWEEN: [YOUR COMPANY NAME] (the \"First Partner\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTNER NAME] (the \"Second Partner\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] RECITALS Partners desire to join together for the pursuit of common business goals. Partners have considered various forms of joint business enterprises for their business activities. Partners desire to enter into a partnership agreement as the most advantageous business form for their mutual purposes. The parties hereto agree to form a limited partnership (the \"Partnership\") under [LAW, CODE OR ACT]. In consideration of the mutual promises contained in this agreement, partners agree as follows: NAME AND DOMICILE The name of the partnership shall be [name]. The principal place of business shall be at [address], [city], [state/province], unless relocated by consent of the partners. Purposes Subject to the limitations set forth in this Agreement, the purposes of the Partnership are to engage in the business of [DESCRIBE ACTIVITIES]; and to conduct other activities as may be necessary or incidental to or desirable in connection with the foregoing. DURATION OF AGREEMENT The term of this agreement shall be for [number] years, commencing on [date], and terminating on [date], unless sooner terminated by mutual consent of the parties or by operation of the provisions of this agreement. CLASSIFICATION AND PERFORMANCE BY PARTNERS Partners shall be classified as active partners, advisory partners, or estate partners. An active partner may voluntarily become an advisory partner, may be required to become one irrespective of age, and shall automatically become one after attaining the age of [age] years, and in each case shall continue as such for [number] years unless the partner sooner withdraws or dies. If an active partner dies, the partner's estate will become an estate partner for [number] years. If an advisory partner dies within [Number] years of having become an advisory partner, the partner will become an estate partner for the balance of the [number]-year period. Only active partners shall have any vote in any partnership matter. At the time of the taking effect of this partnership agreement, all the partners shall be active partners except [name] and [name], who shall be advisory partners. An active partner, after attaining the age of [age] years, or prior to that age if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of all the other active partners determines that the reason for the change in status is bad health, may become an advisory partner at the end of any calendar month on giving [number] calendar months' prior notice in writing of the partner's intention to do so. The notice shall be deemed to be sufficient if sent by registered mail addressed to the partnership at its principal office at [address], [city], [state/province] not less than [number] calendar months prior to the date when the change is to become effective. Any active partner may at any age be required to become an advisory partner at any time if the [executive committee or as the case may be] with the approval of [two-thirds or as the case may be] of the other active partners shall decide that the change is for any reason in the best interests of the partnership, provided notice of the decision shall be given in writing to the partner. The notice shall be signed by the [chairman or as the case may be] of the [executive committee or as the case may be] or, in the event of his or her being unable to sign at the time, by another member of the [executive committee or as the case may be]. The notice shall be served personally on the partner required to change his or her status or mailed by registered mail to the partner's last known address. Change of the partner's status shall become effective as of the date specified in the notice. Every active partner shall automatically and without further act become an advisory partner at the end of the fiscal year in which the partner's birthday occurs. In the event that an active partner becomes an advisory partner or dies, the partner or the partner's estate shall be entitled to the following payments at the following times: [describe] Each active partner shall apply all of the partner's experience, training, and ability in discharging the partner's assigned functions in the partnership and in the performance of all work that may be necessary or advantageous to further the business interests of the partnership. CONTRIBUTION Each partner shall contribute [amount] on or before [date] to be used by the partnership to establish its capital position. Any additional contribution required of partners shall only be determined and established in accordance with Article Nineteen. MANAGEMENT OF THE PARTNERSHIP The Partnership shall be managed by [SPECIFY]. Subject to the limitations specifically contained in this Agreement, [PARTY MANAGING THE PARTNERSHIP] shall have the full, exclusive and absolute right, power and authority to manage and control the Partnership and the property, assets and business thereof. [PARTY MANAGING THE PARTNERSHIP] shall have all of the rights, powers and authority conferred by law or under other provisions of this Agreement. Without limiting the generality of the foregoing, such powers include the right on behalf of the Partnership, in [PARTY MANAGING THE PARTNERSHIP]' sole discretion, to: Acquire, purchase, renovate, improve, and own any property or assets necessary or appropriate or in the best interests of the business of the Partnership, and to acquire options for the purchase of any such property; Borrow money, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the terms of, or extend the time for the payment of, any indebtedness or obligation of the Partnership, and secure such indebtedness by mortgage, deed of trust, pledge or other lien on Partnership assets; Sue on, defend or compromise any and all claims or liabilities in favor of or against the Partnership and to submit any or all such claims or liabilities to arbitration; File applications, communicate and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any part thereof or any other aspect of the Partnership business; Retain services of any kind or nature in connection with the Partnership business, and to pay therefore such remuneration deem reasonable and proper; and Perform any and all other acts deem necessary or appropriate to the Partnership business. TRANSFER OF PARNERSHIP INTERESTS Restrictions on Transfer None of the Partners shall sell, assign, transfer, mortgage, encumber, or otherwise dispose of the whole or part of that Partner's interest in the Partnership, and no purchaser or other transferee shall have any rights in the Partnership as an assignee or otherwise with respect to all or any part of that Partnership interest attempted to be sold, assigned, transferred, mortgaged, encumbered, or otherwise disposed of, unless and to the extent that the remaining Partner(s) have given consent to such sale, assignment, transfer, mortgage, or encumbrance, but only if the transferee forthwith assumes and agrees to be bound by the provisions of this Agreement and to become a Partner for all purposes hereof, in which event, such transferee shall become a substituted partner under this Agreement.","Partnership Agreement","8","https://templates.business-in-a-box.com/imgs/1000px/partnership-agreement-D12551.png","https://templates.business-in-a-box.com/imgs/250px/12551.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12551.xml",{"title":158,"description":6},"partnership agreement",[160,161],{"label":18,"url":95},{"label":21,"url":162},"partnership-agreement","/template/partnership-agreement-D12551",{"description":165,"descriptionCustom":6,"label":166,"pages":167,"size":9,"extension":10,"preview":168,"thumb":169,"svgFrame":170,"seoMetadata":171,"parents":173,"keywords":172,"url":176},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":172,"description":6},"shareholders agreement",[174,175],{"label":18,"url":95},{"label":111,"url":112},"/template/shareholders-agreement-D1016",false,{"seo":179,"reviewer":191,"legal_disclaimer":195,"quick_facts":196,"at_a_glance":198,"personas":202,"variants":227,"glossary":253,"clauses":290,"how_to_fill":341,"common_mistakes":382,"faqs":407,"industries":438,"comparisons":455,"diy_vs_lawyer":469,"jurisdictions":482,"related_template_ids_curated":503,"schema":513,"classification":514},{"meta_title":180,"meta_description":181,"primary_keyword":15,"secondary_keywords":182},"Passive Real Estate Partnership Agreement Template (Free Word)","Free passive real estate partnership agreement template for silent investors and active operators. Used in 190+ countries. Free Word and PDF download.",[183,184,185,186,187,188,189,190],"passive real estate partnership agreement template","real estate limited partnership agreement","real estate investment partnership agreement","passive investor real estate agreement","real estate silent partner agreement","real estate partnership contract template","real estate partnership agreement word","passive real estate investment contract",{"name":192,"credential":193,"reviewed_date":194},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":197,"legal_review_recommended":195,"signature_required":195,"notarization_required":177},"advanced",{"what_it_is":199,"when_you_need_it":200,"whats_inside":201},"A Passive Real Estate Partnership Agreement is a legally binding contract between one or more passive investors — who contribute capital but take no active role in management — and an active managing partner who identifies, acquires, and operates real estate assets. This free Word download covers capital contributions, ownership percentages, profit and loss allocations, decision-making authority, distributions, and exit provisions in a single structured document you can edit online and export as PDF.\n","Use it whenever a capital-providing investor and a hands-on operator join forces to acquire or develop real estate without forming a full LLC or limited partnership entity, or as a governing document alongside an existing entity structure. It is particularly important before any funds are transferred or any property is placed under contract.\n","Party identification and roles, capital contribution schedule, ownership and profit-sharing percentages, management authority and restrictions, distribution waterfall, reporting obligations, transfer and buyout rights, and dissolution terms.\n",[203,207,211,215,219,223],{"title":204,"use_case":205,"icon_asset_id":206},"Passive real estate investors","Deploying capital into a property deal without taking on management duties","persona-investor",{"title":208,"use_case":209,"icon_asset_id":210},"Real estate operators and syndicators","Formalizing the terms under which outside capital partners a deal","persona-real-estate-operator",{"title":212,"use_case":213,"icon_asset_id":214},"Small business owners","Investing surplus cash in real estate alongside an experienced operator","persona-small-business-owner",{"title":216,"use_case":217,"icon_asset_id":218},"Family offices and high-net-worth individuals","Documenting a silent partnership interest in a commercial or residential asset","persona-family-office",{"title":220,"use_case":221,"icon_asset_id":222},"Real estate attorneys and accountants","Providing clients with a baseline governing document for passive investment structures","persona-attorney",{"title":224,"use_case":225,"icon_asset_id":226},"Property developers","Bringing in equity partners for a development project while retaining operational control","persona-property-developer",[228,232,236,240,243,246,250],{"situation":229,"recommended_template":230,"slug":231},"Structuring a formal real estate syndication with multiple passive investors","Real Estate Syndication Operating Agreement","real-estate-operating-agreement-D14043",{"situation":233,"recommended_template":234,"slug":235},"Two equal partners both actively managing a jointly owned property","Real Estate Partnership Agreement (Active Partners)","active-real-estate-partnership-agreement-D13216",{"situation":237,"recommended_template":238,"slug":239},"Single investor contributing equity to a fix-and-flip project","Real Estate Joint Venture Agreement","joint-venture-agreement-D889",{"situation":241,"recommended_template":242,"slug":231},"Passive investor lending capital at a fixed return rather than taking equity","Real Estate Private Lending Agreement",{"situation":244,"recommended_template":101,"slug":245},"Forming an LLC to hold the property and govern all partners","llc-operating-agreement-D5209",{"situation":247,"recommended_template":248,"slug":249},"Short-term co-investment on a single commercial property acquisition","Co-Investment Agreement","investment-agreement-D12831",{"situation":251,"recommended_template":252,"slug":231},"Investor contributing property rather than cash as their partnership interest","Real Estate Contribution Agreement",[254,257,260,263,266,269,272,275,278,281,284,287],{"term":255,"definition":256},"Passive Investor","A partner who contributes capital to the partnership but has no authority over day-to-day management decisions or property operations.",{"term":258,"definition":259},"Managing Partner","The active partner responsible for identifying, acquiring, operating, and eventually disposing of the real estate asset on behalf of the partnership.",{"term":261,"definition":262},"Capital Contribution","The cash or property each partner commits to the venture, as specified in the agreement, which determines their initial ownership percentage.",{"term":264,"definition":265},"Distribution Waterfall","The contractual sequence in which cash distributions are allocated — typically returning investor capital first, then a preferred return, then splitting remaining profits.",{"term":267,"definition":268},"Preferred Return","A minimum annual return — commonly 6–8% of invested capital — paid to passive investors before the managing partner receives any profit share.",{"term":270,"definition":271},"Promote (Carried Interest)","The managing partner's share of profits above the preferred return threshold, typically 20–30%, earned as compensation for deal execution and management.",{"term":273,"definition":274},"Capital Account","A running ledger for each partner that tracks their initial contribution, subsequent investments, allocated profits and losses, and distributions received.",{"term":276,"definition":277},"Right of First Refusal","A contractual right giving existing partners the first opportunity to purchase another partner's interest before it can be sold to a third party.",{"term":279,"definition":280},"Forced Sale Provision","A clause — also called a drag-along right — that allows the managing partner or a majority to compel all partners to sell the property under agreed conditions.",{"term":282,"definition":283},"Accredited Investor","An individual or entity meeting SEC-defined income or net-worth thresholds ($200K annual income or $1M net worth excluding primary residence) required for participation in many private real estate offerings.",{"term":285,"definition":286},"Cash-on-Cash Return","Annual pre-tax cash flow received by an investor divided by the total cash invested, expressed as a percentage — a common metric for evaluating passive real estate returns.",{"term":288,"definition":289},"Exit Strategy","The agreed plan for ultimately realizing investment value, such as a sale of the property, refinance and return of capital, or buyout of the passive partner's interest.",[291,296,301,306,311,316,321,326,331,336],{"name":292,"plain_english":293,"sample_language":294,"common_mistake":295},"Parties, roles, and recitals","Identifies all partners by legal name, designates each as either managing partner or passive investor, and states the purpose of the partnership and the target property or portfolio.","This Passive Real Estate Partnership Agreement ('Agreement') is entered into on [DATE] between [MANAGING PARTNER LEGAL NAME] ('Managing Partner') and [PASSIVE INVESTOR LEGAL NAME] ('Passive Investor') for the purpose of acquiring, holding, and operating the real property located at [PROPERTY ADDRESS] ('Property').","Describing the property by street address only. If the legal description differs — which is common with subdivided lots or commercial parcels — the wrong parcel may be captured by the agreement.",{"name":297,"plain_english":298,"sample_language":299,"common_mistake":300},"Capital contributions and ownership percentages","States the exact dollar amount or property value each partner contributes, when contributions are due, and what ownership percentage each contribution purchases.","Passive Investor shall contribute $[AMOUNT] on or before [DATE] in exchange for a [X]% ownership interest. Managing Partner shall contribute $[AMOUNT] and operational expertise in exchange for a [Y]% ownership interest. Total capitalization: $[TOTAL].","Leaving the contribution schedule open-ended with language like 'as needed.' Courts have found this unenforceable for subsequent capital calls, leaving the managing partner unable to compel additional investment when required.",{"name":302,"plain_english":303,"sample_language":304,"common_mistake":305},"Management authority and passive investor restrictions","Grants the managing partner exclusive authority over day-to-day operations, leasing, and routine maintenance while listing specific major decisions — sale, refinancing, capital improvements above a threshold — that require passive investor approval.","Managing Partner shall have sole authority over routine property management, tenant relations, and expenditures under $[THRESHOLD]. The following actions require written consent of the Passive Investor: sale or transfer of the Property, refinancing exceeding $[AMOUNT], or capital improvements exceeding $[THRESHOLD].","Granting the passive investor operational veto rights on routine decisions. This can reclassify the investor as an active partner under SEC and tax rules, triggering securities registration requirements and self-employment tax exposure.",{"name":307,"plain_english":308,"sample_language":309,"common_mistake":310},"Distribution waterfall","Defines the priority sequence for distributing available cash — first returning contributed capital, then paying the preferred return, then splitting residual profits between the parties.","Distributions shall be made in the following order: (1) Return of Passive Investor's contributed capital; (2) Preferred Return of [X]% per annum on unreturned capital to Passive Investor; (3) remaining proceeds split [A]% to Passive Investor and [B]% to Managing Partner.","Omitting a definition of 'available cash' — failing to clarify whether distributions are calculated before or after reserves for repairs, taxes, and debt service leads to disputes on every distribution event.",{"name":312,"plain_english":313,"sample_language":314,"common_mistake":315},"Managing partner compensation and promote","Establishes the managing partner's fees — acquisition fee, asset management fee, and construction management fee — separate from the promote earned on profits above the preferred return threshold.","Managing Partner shall receive: (a) an Acquisition Fee of [X]% of purchase price at closing; (b) an Asset Management Fee of [X]% of gross revenues per month; and (c) a Promote of [X]% of net profits above the Preferred Return threshold.","Failing to specify whether management fees are paid before or after the distribution waterfall. Fees paid from gross revenue before the waterfall effectively reduce the passive investor's return — this must be explicit, not implied.",{"name":317,"plain_english":318,"sample_language":319,"common_mistake":320},"Reporting and accounting obligations","Requires the managing partner to provide periodic financial statements, tax documents, and property reports to the passive investor, with defined timelines and formats.","Managing Partner shall deliver to Passive Investor: (a) monthly rent roll and operating statements within [15] days of month-end; (b) annual audited financials within [90] days of fiscal year-end; (c) Schedule K-1 within [30] days of tax filing.","No reporting clause at all, or reporting 'upon request' only. Passive investors have no visibility into asset performance without a mandatory reporting schedule — disputes over undisclosed expenses are far more common without it.",{"name":322,"plain_english":323,"sample_language":324,"common_mistake":325},"Transfer restrictions and right of first refusal","Prohibits either partner from transferring their interest without the other's consent and grants existing partners the right to purchase a departing partner's interest at the offered price before any third-party sale.","Neither party may transfer, assign, or encumber their interest without the prior written consent of the other party. If either party receives a bona fide third-party offer, the non-transferring party shall have [30] days to match the offer and acquire the interest ('Right of First Refusal').","No transfer restriction clause at all — allowing the managing partner's interest to be transferred to an unqualified operator, or the passive investor's interest sold to an unknown third party without the existing partner's knowledge.",{"name":327,"plain_english":328,"sample_language":329,"common_mistake":330},"Exit events and forced sale","Specifies the conditions under which the property will be sold, the process for agreeing on a sale price, and whether the managing partner can compel a sale after a defined hold period.","The Managing Partner may initiate a sale of the Property after a minimum hold period of [X] years by providing [60] days' written notice. If the parties cannot agree on the sale terms within [30] days, either party may trigger a buy-sell procedure under Section [X].","No minimum hold period, allowing the managing partner to force a sale immediately after acquisition to collect the acquisition fee — leaving the passive investor with a taxable event and no meaningful return.",{"name":332,"plain_english":333,"sample_language":334,"common_mistake":335},"Default, removal, and dispute resolution","Defines what constitutes a default by either party, the cure period allowed before remedies are triggered, the process for removing a managing partner who is in default, and whether disputes go to arbitration or litigation.","A party is in default upon failure to perform any material obligation and failure to cure within [30] days of written notice. In the event of Managing Partner's default, Passive Investor may remove the Managing Partner and appoint a replacement by written notice. All disputes shall be resolved by binding arbitration in [CITY, STATE].","No removal mechanism for a defaulting managing partner. Without one, the passive investor's only remedy is filing suit — which is expensive, slow, and may produce a judgment that is difficult to enforce against the asset.",{"name":337,"plain_english":338,"sample_language":339,"common_mistake":340},"Governing law and entire agreement","States which state or country's laws govern the agreement and confirms that the written contract supersedes all prior negotiations, term sheets, and verbal promises.","This Agreement shall be governed by the laws of [STATE / PROVINCE / COUNTRY]. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior representations, negotiations, and understandings.","Choosing a governing law with no connection to where the property is located. Courts in the property's state often apply local real property law regardless of the contract's choice-of-law clause, creating a conflict.",[342,347,352,357,362,367,372,377],{"step":343,"title":344,"description":345,"tip":346},1,"Identify all parties with their legal names and roles","Enter the full legal name of every managing partner and passive investor — individuals use full legal name; entities use the registered legal entity name. Clearly designate each party's role in the opening recitals.","If the managing partner is an LLC or corporation, verify the registered name in the state's entity database before execution — a mismatch voids signature authority.",{"step":348,"title":349,"description":350,"tip":351},2,"Describe the property with its full legal description","Include the street address, county, and the legal description as it appears on the deed or title commitment. For portfolios, attach a Schedule A listing each property.","Pull the legal description from the preliminary title report, not from a tax record — assessor records frequently contain outdated or abbreviated descriptions.",{"step":353,"title":354,"description":355,"tip":356},3,"Define capital contributions and the contribution schedule","Enter the exact dollar amount each partner commits, the date or milestone by which it must be delivered, and the ownership percentage it purchases. Address capital call procedures for future funding needs.","Tie the passive investor's contribution to a specific wire instruction or escrow account — open-ended 'deliver to managing partner' language increases the risk of commingling.",{"step":358,"title":359,"description":360,"tip":361},4,"Set the distribution waterfall with defined thresholds","Specify the preferred return percentage, whether it accrues or compounds, the order of distributions, and the promote split above the preferred return. Define 'available cash' to include or exclude reserves.","Use a numeric example in a Schedule to illustrate how $100,000 of distributable cash flows through the waterfall — this eliminates interpretive disputes at exit.",{"step":363,"title":364,"description":365,"tip":366},5,"Scope the managing partner's authority and consent thresholds","List every action the managing partner can take without consent and every action requiring passive investor approval. Set a specific dollar threshold for expenditures that trigger the approval requirement.","Set the approval threshold at 10–15% of the property's annual operating budget rather than a fixed dollar amount — this scales with the asset without requiring amendment.",{"step":368,"title":369,"description":370,"tip":371},6,"Establish the reporting schedule","Enter specific delivery deadlines for monthly operating reports, annual financials, and tax documents. Name the format (PDF, QuickBooks export) and the delivery method (email to a named address).","Include a provision that the passive investor may request a property inspection and books-and-records review no more than once per calendar year — this preserves transparency without disrupting operations.",{"step":373,"title":374,"description":375,"tip":376},7,"Define the hold period and exit mechanics","Set a minimum hold period before a forced sale can be triggered, the process for agreeing on a sale price, and the buy-sell procedure if the parties disagree.","A 3–5 year minimum hold period is market standard for most value-add and stabilized acquisition strategies — match it to the investment thesis in your underwriting model.",{"step":378,"title":379,"description":380,"tip":381},8,"Execute before any funds are transferred or property is contracted","Both parties must sign the agreement — and any required notarized acknowledgments — before the passive investor wires capital or the managing partner places the property under contract.","Use a timestamped e-signature platform and store the executed copy in a shared, neutral location such as a cloud drive both parties can access — do not rely solely on email chains.",[383,387,391,395,399,403],{"mistake":384,"why_it_matters":385,"fix":386},"No minimum hold period before forced sale","Without a hold-period clause, a managing partner can sell the property immediately after acquisition to collect the acquisition fee, leaving the passive investor with a taxable gain and no meaningful return on a deal that never had time to perform.","Insert a minimum hold period of at least 2–3 years, after which a sale requires written notice and a defined buy-sell process if the parties disagree on terms.",{"mistake":388,"why_it_matters":389,"fix":390},"Vague capital contribution schedule","Open-ended language like 'investor shall fund as needed' is frequently unenforceable in court, leaving the managing partner unable to compel required capital calls and forcing the deal into default or personal funding.","Specify exact dollar amounts, delivery dates, wire instructions or escrow details, and the consequence — dilution or buyout at a formula price — if a capital call is not met.",{"mistake":392,"why_it_matters":393,"fix":394},"Passive investor granted operational veto rights","Giving the passive investor approval rights over routine decisions can reclassify them as an active partner under IRS rules, eliminating passive loss treatment and potentially triggering SEC securities registration requirements.","Limit passive investor consent rights to material decisions only — sale, refinancing above a stated threshold, and capital improvements above a stated threshold — and document this clearly in the management authority clause.",{"mistake":396,"why_it_matters":397,"fix":398},"No definition of 'available cash' in the distribution clause","Without a precise definition, each distribution event triggers a dispute over whether reserves for taxes, debt service, and capital expenditures should be deducted before or after calculating distributable cash.","Define 'available cash' explicitly as gross operating revenues minus operating expenses, debt service, and a defined reserve amount — and reference this definition in every distribution provision.",{"mistake":400,"why_it_matters":401,"fix":402},"Choosing governing law that conflicts with property location","Courts in the state where the property is located will typically apply local real property and landlord-tenant law regardless of the contract's choice-of-law clause, creating an unenforceable conflict.","Set governing law to the state or province where the property is physically located, or — for multi-state portfolios — specify governing law for real property matters separately from commercial dispute provisions.",{"mistake":404,"why_it_matters":405,"fix":406},"No removal mechanism for a defaulting managing partner","Without a contractual removal process, the passive investor's only recourse against a non-performing or fraudulent managing partner is expensive litigation — during which the asset may deteriorate or be mismanaged further.","Include a specific default-and-cure clause with a 30-day notice period and an explicit mechanism for the passive investor to remove and replace the managing partner upon an uncured material default.",[408,411,414,417,420,423,426,429,432,435],{"question":409,"answer":410},"What is a passive real estate partnership agreement?","A passive real estate partnership agreement is a legally binding contract between a capital-contributing investor — who takes no active role in managing the property — and an operating partner who handles acquisition, management, and disposition. It defines ownership percentages, the distribution waterfall, management authority, reporting obligations, and exit rights. It functions as the governing document for the investment relationship, regardless of whether a separate LLC or limited partnership entity is formed to hold the asset.\n",{"question":412,"answer":413},"What is the difference between a passive and active real estate partner?","A passive partner contributes capital and receives a share of profits but has no authority over day-to-day property decisions. An active or managing partner executes the investment strategy — sourcing the deal, arranging financing, overseeing operations, and handling disposition. The distinction matters for tax purposes: passive partners may claim passive activity losses only against passive income, while active partners are subject to self-employment tax on their management income. Misclassifying an active partner as passive can trigger IRS penalties.\n",{"question":415,"answer":416},"Do I need a separate LLC to use a passive real estate partnership agreement?","Not necessarily. A partnership agreement can govern the relationship between parties who hold title jointly or through a nominee arrangement. However, forming an LLC or limited partnership to hold the property is strongly advisable in most cases — it limits each partner's personal liability to their invested capital and provides a cleaner ownership and tax structure. The partnership agreement then serves as the governing document for the entity or sits alongside the operating agreement.\n",{"question":418,"answer":419},"What is a preferred return in a real estate partnership?","A preferred return is a minimum annual return — typically 6–8% of invested capital — paid to the passive investor before the managing partner receives any profit share above their management fees. It compensates the passive investor for the illiquidity and risk of the investment. The preferred return may be cumulative (accruing unpaid amounts to future periods) or non-cumulative, depending on what the parties negotiate. Most institutional passive investment structures include a cumulative preferred return.\n",{"question":421,"answer":422},"What is a promote or carried interest?","A promote — also called carried interest — is the managing partner's disproportionate share of profits above the preferred return threshold, typically 20–30% of net profits. It is the primary economic incentive for the managing partner to maximize the property's performance. For example, after the passive investor receives their preferred return and capital back, the managing partner might receive 30% of remaining profits while the passive investor receives 70% — even though the passive investor contributed 90% of the capital.\n",{"question":424,"answer":425},"Is a passive real estate partnership agreement a securities offering?","It can be, depending on how the arrangement is structured and marketed. Under US securities law, a passive investment interest in a real estate partnership — particularly where multiple investors are involved — may constitute a security requiring registration or an exemption such as Regulation D. One-on-one arrangements between a single active and passive partner are generally lower risk, but any offering to multiple investors should be reviewed by a securities attorney before funds are accepted.\n",{"question":427,"answer":428},"What happens if the managing partner wants to sell the property before I'm ready?","The agreement governs this scenario through its exit provisions. A well-drafted agreement includes a minimum hold period, a required notice period before initiating a sale, and a buy-sell mechanism — sometimes called a shotgun clause — that lets either party trigger a forced buyout at a stated price when they cannot agree. Without these clauses, a managing partner with majority authority may be able to force a sale at any time, leaving the passive investor with little recourse beyond litigation.\n",{"question":430,"answer":431},"How are taxes handled in a passive real estate partnership?","Partnerships are typically pass-through entities for tax purposes — profits, losses, depreciation, and other tax items flow through to each partner's individual return in proportion to their ownership percentage. Each partner receives a Schedule K-1 annually. Passive investors may use allocated losses only against other passive income unless the real estate professional exception applies. The managing partner's fees and promote may be treated as self-employment income. Tax treatment varies by jurisdiction and entity structure — consult a CPA before finalizing the agreement.\n",{"question":433,"answer":434},"What should I look for before signing a passive real estate partnership agreement?","Review six key areas before signing: the capital contribution schedule and capital call mechanics; the distribution waterfall and preferred return terms; the managing partner's fee structure and promote split; the reporting obligations and your access to financial records; the minimum hold period and exit provisions; and the default and removal clause. Pay particular attention to whether the managing partner's fees are deducted before or after the waterfall — this significantly affects your actual return.\n",{"question":436,"answer":437},"Do I need a lawyer to prepare this agreement?","For straightforward two-party arrangements involving a single domestic property and a clear deal structure, a high-quality template is a practical starting point. Engage a real estate attorney when the deal involves multiple passive investors, a securities exemption is required, the property is in a complex jurisdiction, or the investment exceeds $500K. A template review by a real estate attorney typically costs $500–$1,500 and is worthwhile for any transaction with material capital at risk.\n",[439,443,447,451],{"industry":440,"icon_asset_id":441,"specifics":442},"Residential Real Estate","industry-real-estate","Fix-and-flip projects, buy-and-hold rental properties, and small multifamily acquisitions where a local operator partners with an out-of-market capital investor.",{"industry":444,"icon_asset_id":445,"specifics":446},"Commercial Real Estate","industry-construction","Office, retail, and industrial acquisitions where institutional or high-net-worth passive investors contribute equity alongside an experienced commercial operator managing leasing and asset management.",{"industry":448,"icon_asset_id":449,"specifics":450},"Real Estate Development","industry-property-developer","Ground-up development and value-add renovation projects where a developer brings in passive equity to bridge the gap between senior debt and required project capitalization.",{"industry":452,"icon_asset_id":453,"specifics":454},"Professional Services","industry-professional-services","Attorneys, accountants, and financial advisors who invest surplus professional income passively in real estate alongside operator clients, requiring clear documentation of passive status for liability and tax purposes.",[456,459,462,465],{"vs":101,"vs_template_id":457,"summary":458},"llc-operating-agreement-D13235","An LLC operating agreement governs the internal affairs of a limited liability company formed to hold the property and applies to all members — it is an entity-level document. A passive real estate partnership agreement governs the relationship between partners directly and can operate with or without a separate entity. The two documents are complementary when an LLC holds the asset: the operating agreement controls the entity, while the partnership agreement may document the investment terms between the partners who own the LLC.",{"vs":86,"vs_template_id":460,"summary":461},"joint-venture-agreement-D175","A joint venture agreement typically contemplates two or more parties with shared decision-making authority over a specific project. A passive real estate partnership agreement is structurally different: one party is exclusively active and one is exclusively passive. If both parties will be involved in management decisions, a joint venture agreement is more appropriate than a passive partnership structure.",{"vs":46,"vs_template_id":463,"summary":464},"real-estate-purchase-agreement-D13231","A real estate purchase agreement governs the transaction between a buyer and seller for the acquisition of a specific property — it does not address the internal relationship between co-investors. A passive real estate partnership agreement governs what happens after acquisition: how profits are split, who manages the asset, and how the investment is eventually unwound. Both documents are needed in a typical deal.",{"vs":466,"vs_template_id":467,"summary":468},"Private Lending Agreement","D{PRIVATE_LENDING_ID}","A private lending agreement structures capital as debt — the investor receives a fixed interest rate and return of principal on a defined schedule, with no equity upside or ownership stake. A passive real estate partnership agreement structures capital as equity — the investor shares in profits and losses and holds an ownership interest. The choice between debt and equity has significant tax, risk, and return implications that should be evaluated before structuring any deal.",{"use_template":470,"template_plus_review":474,"custom_drafted":478},{"best_for":471,"cost":472,"time":473},"Two-party arrangements with a single domestic property, a straightforward deal structure, and investment under $250K","Free","30–60 minutes",{"best_for":475,"cost":476,"time":477},"Deals involving $250K–$1M in passive equity, out-of-state properties, or first-time passive investors who need comfort on waterfall mechanics","$500–$1,500 for a real estate attorney review","3–7 days",{"best_for":479,"cost":480,"time":481},"Multi-investor structures, potential securities exemption requirements, commercial assets above $1M, or cross-border investment arrangements","$2,500–$8,000+","2–4 weeks",[483,488,493,498],{"code":484,"name":485,"flag_asset_id":486,"note":487},"us","United States","flag-us","Passive investment interests in real estate partnerships may qualify as securities under the Howey test — consult a securities attorney before accepting capital from multiple passive investors. Tax treatment of passive losses is governed by IRC §469; passive investors may only deduct allocated losses against passive income unless the real estate professional exception under §469(c)(7) applies. State-level rules on partnership formation, transfer taxes, and landlord-tenant law vary significantly and should be reviewed for the state where the property is located.",{"code":489,"name":490,"flag_asset_id":491,"note":492},"ca","Canada","flag-ca","Passive real estate partnerships in Canada are governed by provincial partnership legislation — each province (Ontario, BC, Alberta, Quebec) has its own Partnership Act. Quebec operates under the Civil Code rather than common law, requiring French-language documents for provincially regulated transactions. Passive income from real estate partnerships is generally included in income rather than eligible for capital gains treatment unless structured through a corporation. Securities laws may apply to multi-investor structures in each province under provincial securities commissions.",{"code":494,"name":495,"flag_asset_id":496,"note":497},"uk","United Kingdom","flag-uk","Real estate partnerships in the UK are commonly structured as limited partnerships under the Limited Partnerships Act 1907, which requires at least one general partner with unlimited liability. Passive investors seeking limited liability should ensure the limited partnership is properly registered at Companies House. Stamp Duty Land Tax (SDLT) applies to property transfers and partnership interest transfers in England and Northern Ireland; Land and Buildings Transaction Tax applies in Scotland. HMRC treats partnership income as flowing through to individual partners' self-assessment returns.",{"code":499,"name":500,"flag_asset_id":501,"note":502},"eu","European Union","flag-eu","Real estate partnership structures vary significantly across EU member states — Germany uses the GmbH & Co. KG structure, France uses the Société Civile Immobilière (SCI), and Spain uses the Sociedad de Responsabilidad Limitada. Cross-border passive investment in EU real estate may trigger withholding tax obligations and local property registration requirements. GDPR applies to the processing of partner personal data in any agreement documentation. Anti-money laundering regulations across EU member states require enhanced due diligence for real estate transactions above certain thresholds.",[239,245,504,505,506,507,508,509,510,249,511,512],"real-estate-purchase-agreement-D13234","non-disclosure-agreement-nda-D12692","promissory-note-D434","partnership-agreement-D12551","shareholders-agreement-D1016","letter-of-intent-D12695","offer-to-purchase-real-estate-property-D1190","limited-partnership-agreement-D891","confidentiality-agreement-D950",{"emit_how_to":195,"emit_defined_term":195},{"primary_folder":95,"secondary_folder":515,"document_type":516,"industry":517,"business_stage":518,"tags":519,"confidence":524},"partnerships-and-joint-ventures","agreement","real-estate","all-stages",[520,517,521,522,523],"partnership","investment","capital-contribution","profit-sharing",0.95,"\u003Ch2>What is a Passive Real Estate Partnership Agreement?\u003C/h2>\n\u003Cp>A \u003Cstrong>Passive Real Estate Partnership Agreement\u003C/strong> is a legally binding contract that establishes the terms of a co-investment arrangement between a capital-contributing investor — who plays no active role in managing the property — and an operating partner who sources, acquires, manages, and eventually disposes of the real estate asset. The agreement defines each party's ownership percentage, the capital contribution schedule, the distribution waterfall, the managing partner's authority and fees, and the process for resolving disputes, transferring interests, and exiting the investment. It functions as the primary governing document for the economic relationship between the parties, whether they hold the property directly, through an LLC, or through a limited partnership structure.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a written passive real estate partnership agreement, the terms of your investment exist only in emails, verbal discussions, and assumptions — none of which hold up when the property underperforms, a partner wants to exit, or a dispute arises over how distributions are calculated. A passive investor who has wired capital with no signed agreement has no enforceable claim to a specific return, no right to financial reporting, and no mechanism to remove a managing partner who is mismanaging the asset. The managing partner, conversely, has no contractual authority to make decisions without the investor second-guessing every expense. Courts in the absence of a written agreement will often default to equal partnership rules under state law, overriding the economic deal the parties actually intended. This template closes those gaps before the first dollar is transferred — protecting both the passive investor's capital and the managing partner's operational authority with a single, clearly structured document.\u003C/p>\n",1781185967318]