Partnership Agreement for Electricians

What a good one includes

• A clear clause identifying which partner provides the qualifying Master Electrician license and how the business will proceed if that partner leaves.
• A detailed list of initial financial contributions and physical assets, including vans and specialty diagnostic tools, establishing who owns what if the partnership dissolves.
• A specific breakdown of administrative duties versus field work, outlining who manages client invoicing, scheduling, and on-site project management.
• A defined schedule and formula for how profits are distributed and how monthly partner draws are calculated based on billable field hours or equity.
• A structured process for voting on major business choices, like purchasing new commercial vehicles or taking on debt, including a tie-breaker mechanism.
• A predetermined buyout formula and transition plan specifying how a departing partner's shares will be valued and paid out over time.

Common mistakes to avoid

• Failing to address what happens to the company's operating ability if the partner holding the mandatory electrical contractor license loses their credential or dies.
• Neglecting to inventory and assign ownership to expensive equipment like thermal imagers, conduit benders, and utility trucks, leading to bitter disputes during a split.
• Giving equal voting power to a non-working financial investor on day-to-day operational matters like field safety rules or dispatch scheduling.
• Forgetting to define how existing customer databases and recurring maintenance contracts are valued and split if the business dissolves.

Frequently asked questions