Legal Question in Business Law in California

The only way to get a customized partnership agreement (which really every partnership should have, not some form) you need to hire an attorney to draw it up for you. A good business attorney will sit down with you and your partner and learn about your business and the business relationship between the two of you and come up with an agreement that really works for you. A good attorney will also discuss with you options other than partnerships, such as an LLC or S-Corporation that may be better suited to your business.

The problem with using "canned" agreements off of the web is that they rarely cover your specific situation perfectly. A partnership agreement is the framework for the operation of the business, AND for the dissolution of the business if things don't work out. (Imagine a pre-nup for business partners).

Take it seriously, and engage an attorney to advise you about this. The headaches you avoid will be worth the expense. (which shouldn't be excessive).

And to add to the above, by operating as a partnership, you are personally exposed to numerous liabilities, including those committed to by your partner and of which you may remain totally unaware. As an auto repair business, you may have employees, and those employees further expose your personal assets through their conduct. Thus, imagine that you ask one of your employees to pick up a part from a supplier. On his way there, he runs a red light and kills a mother and her child crossing the cross walk. You would be personally liable for the judgment in the ensuing lawsuit. Forget the partnership, form a corporation, and make sure you are insured properly. The corporate entity can also address the issues you raised in your question, through a shareholder's agreement. You need to invest some money now in a good lawyer, because you're risking a lot more by trying to do it yourself. You can reach me by email with additional questions -- [email protected]

As suggested, the only way you're going to get an appropriate agreement is through experienced business attorneys, at a cost. HOWEVER, let me share with you something I tell every person that asks for that -- I refuse to allow ANY client to enter into a general partnership. Period. I will not help them to become involved in an arrangement that makes them potentially unlimitedly liable for any and all acts of any partner. I can't tell you how many times innocent partners have been hit by personal legal judgments that wiped them out, because of their partner's negligence, or worse. By the way, you are already in a partnership, and at full risk. Get out of that situation by forming a corporation or variant that works for your tax and income purposes.