Texas Partnership Agreement Attorneys

Protect What You're Building with a Well-Drafted Partnership Agreement

Most business partners start with trust. The best ones put that trust in writing before they need it.

When questions come up about who controls what, who gets paid first, or what happens if one partner wants out, the answer cannot be "we'll figure it out." By then, the conversation is already a dispute. A well-drafted partnership agreement answers those questions before the business depends on them.

At Hendershot Cowart P.C., we draft, review, and structure Texas partnership agreements for business owners across industries – from first-time partners signing a general partnership agreement to multi-investor LPs and joint ventures in real estate, oil and gas, and construction. We have also spent nearly 40 years on the other side of these situations, litigating what happens when agreements are missing, vague, or one-sided.

The most expensive partnership disputes we handle are not caused by bad partners. They are caused by good partners who never put the details in writing.

If you are forming a partnership or reviewing an existing agreement, call (713) 783-3110 to speak with a Texas partnership attorney.

On This Page:

• Partnership Structures We Draft Agreements For
• What a Texas Partnership Agreement Should Cover
• Partnership Agreement Counsel Across Texas Industries
• Why You Need a Written Partnership Agreement
• How We Work with Texas Business Partners
• Frequently Asked Questions
• Start Your Partnership on the Right Foot

We draft and review partnership agreements for all types of business partnerships, including:

1. General partnership. Two or more people carrying on a business for profit. No state filing required, which means a general partnership can form without anyone intending to create one. Every partner carries unlimited personal liability for all business debts, including those created by co-partners. A written agreement is your primary tool for defining who has authority, how profits are split, and what happens when a partner wants out.
2. Limited partnership (LP). At least one general partner with full personal liability and one or more limited partners whose exposure is capped at their investment. The LP structure is common in real estate, oil and gas, and family wealth structures where a clear line between active management and passive investment matters. The partnership agreement – along with the LP's Certificate of Formation – governs both.
3. Limited liability partnership (LLP). All partners are shielded from personal liability for a co-partner's negligence or misconduct. The structure most professional service firms use when everyone is actively practicing and no one should be exposed to someone else's mistakes. We draft LLP agreements for law firms, accounting practices, medical groups, and engineering and architecture firms across Texas.
4. Limited liability limited partnership (LLLP). An LP that has registered with the Texas Secretary of State for liability protection. All partners – both general partners and limited partners – receive full liability shields. The partnership agreement – along with the LP's Certificate of Formation and the LLP registration – governs both the partnership structure and the liability protection. 
5. Joint venture. A partnership formed around a single project or transaction. When the project ends, so does the venture. Because joint ventures can apply general partnership liability rules (unless filed as another entity type), the agreement must define scope, duration, cost-sharing, and exit terms with precision.

Still deciding which partnership type fits your business? Our partnership formation page covers the differences in detail – liability exposure, management structure, Texas filing requirements, and which structure works best for your industry. 

Texas does not require a written partnership agreement. That means if you do not have one, Texas partnership law fills in the blank – on its own terms, not yours. Texas law treats partners as equal owners with equal votes, regardless of what you and your partner intended.

A well-drafted agreement replaces those defaults with your actual intentions. At minimum, it should address:

• Duration and business purpose – whether the partnership is formed for a specific term, a defined project, or an indefinite period. Without a stated term or purpose, any partner can request a winding up of the partnership under Texas law.
• Ownership and capital contributions – who owns what percentage, what each partner contributed to earn it, and whether additional contributions will be required.
• Profit and loss allocation – how earnings are distributed, on what schedule, and whether any profits are retained
• Decision-making authority – who can sign contracts on behalf of the partnership, what decisions require a vote, and what the vote threshold is. In 50/50 partnerships, a tie-breaking mechanism should be considered to prevent deadlock.
• Roles and responsibilities – day-to-day management duties, what happens if one partner stops performing, and how workload disputes are handled
• Admitting new partners – what process and approval is required to bring in new ownership
• Partner exits and retirement – how a departing partner's interest is handled and whether remaining partners have a right to buy it
• Buy-sell provisions – what triggers a buyout (death, disability, divorce, voluntary departure), how the partner’s interest is valued, and how the payment is structured
• Non-compete and non-solicitation obligations – what departing partners can and cannot do after they leave
• Confidentiality and trade secret protections – what constitutes proprietary information and how it is protected
• Dispute resolution – usually mediation first, then arbitration or litigation; and which state's law governs
• Dissolution procedures – how the partnership winds down and assets are distributed if the business ends

The most important provisions are not the ones that cover what you've planned – they're the ones that cover what you haven't thought about yet.

Partnership agreements are not one-size-fits-all. A dental practice co-ownership agreement raises different legal questions than a real estate investment LP or a professional services LLP. We represent business owners and partners in industries where the structure and the stakes both require experienced, industry-aware counsel:

• Healthcare and medical practices – physician group partnerships, dental practice co-ownership, medical spa ownership structures, and MSO arrangements subject to Texas corporate practice of medicine rules
• Oil and gas – joint operating agreements, working interest partnerships, farmout agreements, and upstream venture formations
• Real estate – investment LPs, development joint ventures, and DST arrangements
• Construction and engineering – project-specific joint ventures and teaming agreements
• Professional services – LLP formation for law, accounting, architecture, and consulting firms where cross-partner liability is a primary concern
• Family businesses and multi-generational ownership – succession-aware agreements that protect family relationships alongside business interests

Many of these industries carry specific regulatory requirements that affect how partnership agreements must be structured. A template off the internet does not account for Texas healthcare compliance rules, Railroad Commission requirements, or the licensing constraints that govern professional LLPs. We draft agreements built for your industry, not around it.

Good partnerships cannot always prevent bad outcomes. The death of a partner. A disability that removes them from operations. A divorce that brings a former spouse into partial ownership. An economic downturn that creates irreconcilable disagreements about the path forward. 

Every one of these situations has ended profitable businesses – businesses with good partners and no written agreement. A properly drafted agreement gives you a roadmap before the situation becomes a crisis.

Here is what a written partnership agreement actually does for your business:

• It establishes your rights in writing – so that if a co-partner disputes what you were each promised, there is a document to set the record straight.
• It resolves deadlocks – or prevents them from becoming permanent. In a two-partner business with no tiebreaker mechanism, a single unresolved disagreement can bring operations to a standstill. A written agreement anticipates this by designating a tiebreaker, requiring mediation before either partner can escalate, or establishing a buyout process that activates when partners cannot move forward together.
• It defines who has authority – and keeps one partner from making binding commitments the others did not agree to.
• It sets the dispute resolution path – so that a disagreement goes to mediation or arbitration rather than immediately to court.
• It protects what you've built – ensuring that trade secrets, client relationships, and proprietary processes are protected should a partner walk out the door.

A well-drafted partnership agreement typically costs a fraction of what a single partnership dispute costs to litigate. The disputes we see most often – deadlocks, buyout challenges, and business divorces – can take many months, and even years, to resolve. The partnership agreement is the cheapest way to avoid prolonged battles and keep the business running.

Have questions about your partnership agreement? Call (713) 783-3110 or contact us online to speak with a Texas partnership attorney.

We represent business owners at every stage of the partnership lifecycle – from the first conversation about structuring a new partnership to reviewing an existing agreement that no longer fits the business you've built.

Our engagement typically covers:

• Understanding your business goals, ownership expectations, and any concerns about how responsibilities will be divided between partners
• Advising on partnership structure – which entity type fits your liability tolerance, management model, and tax situation
• Drafting a comprehensive agreement tailored to your industry and your specific partners
• Reviewing and negotiating agreements presented to you by a co-partner or their attorney
• Updating existing agreements when the business changes – new partners, ownership restructuring, or evolving business terms

We also serve as registered agent for many of the entities we help form, providing ongoing service after formation is complete.

Ready to put your partnership on solid legal ground? Call (713) 783-3110 or contact us online to schedule a consultation with a Texas partnership attorney.

Do I need a written partnership agreement in Texas?

No – Texas does not require one. But operating without a written agreement means the Texas Business Organizations Code governs your partnership by default. Those default rules treat all partners as equal owners with equal votes and equal profit rights, regardless of what you agreed to. If that is not what you intended, get it in writing.

What is a buyout agreement and do I need one?

A buyout agreement – sometimes embedded in the partnership agreement, sometimes a standalone document – governs what happens to a partner's ownership interest when a triggering event occurs: death, disability, divorce, retirement, or voluntary exit. It establishes who can buy the departing partner's interest, how the business is valued for that purchase, and how payment is structured. Without one, a partner's death can force you into co-ownership with their estate. A partner's divorce can give a partial interest to their spouse. A departing partner can sell to an unknown third party. A buy-sell provision can prevent that.

What happens if my partner and I disagree and there is no partnership agreement?

Texas default rules apply – which means equal ownership and equal decision-making authority, even if that is not how the business operates. A deadlock between equal partners with no agreement and no dispute resolution mechanism can result in a negotiated settlement or a court-supervised dissolution or receivership. 

A written agreement with a clear dispute resolution provision – mediation first, then arbitration or a designated tiebreaker – is how you keep a disagreement from becoming a dissolution.

How much does a Texas partnership agreement cost?

Attorney fees vary based on the complexity of the partnership – number of partners, the nature of the business, what needs to be negotiated, and how many custom provisions are required. Simple two-partner agreements in lower-risk businesses are less involved than multi-investor LP structures in regulated industries. What we can tell you is this: the cost of drafting a sound agreement is almost always less than the cost of litigating what happens without one. Contact our firm to discuss your situation and get transparent guidance on fees.

Can a partnership agreement be changed after it is signed?

Yes. Partnership agreements can be amended when all partners (or the percentage specified in the amendment provision) agree. As your business evolves – new partners join, ownership shifts, the business model changes – the agreement should evolve with it. We help existing partnerships review and update governing documents to make sure protections keep pace with the business they're protecting.

Hendershot Cowart P.C. has represented Texas business owners in partnership matters since 1987 – drafting agreements, structuring entities, and litigating what happens when neither exists.

We have seen what a well-drafted agreement protects. We have also litigated what happens without one. Those are two very different outcomes, and the difference usually comes down to what partners did – or did not – put in writing at the start.

Call (713) 783-3110 or contact us online to speak with a Texas partnership attorney.