At a glance
A partnership agreement (civil partnership, under Articles 571 onwards of Iran's Civil Code) or, in a registered company, a shareholders' agreement defines the partners' relationship: who contributes what, how decisions are made, how profit and loss are shared and what happens if someone wants to leave.
Key clauses
- Each partner's contribution (cash, in-kind, expertise and time) and its valuation
- How profit and loss are shared
- Management, signing authority and decisions requiring unanimity
- Non-compete and confidentiality obligations
- Partner exit, pre-emption rights and valuation method
- Death or incapacity of a partner and what happens to their share
- Dispute resolution and management deadlock
Unregistered partnership or company registration?
A civil partnership suits limited, short-term collaborations; for an ongoing business, registering a company creates an independent legal entity with limited liability. Even after registration, a shareholders' agreement is essential for matters the articles don't cover.
Frequently asked questions
Yes, by agreement; but the value of that contribution and the conditions attached to it (such as staying with the business for a set period) must be stated in the agreement.
The agreement should provide a deadlock mechanism, such as referral to arbitration, a buy-out right or dissolution.