Partnership agreement in Kenya: Template, Key Clauses and Local Law (2026)

What a partnership agreement is under Kenyan law A partnership is the relationship between people carrying on a business together with a view to profit. A partnership agreement, sometimes called a partnership deed, is the written contract that records how the partners run that business: who put in what, how profits and losses are shared, how decisions are made, and what happens when a partner leaves or the partnership ends. In Kenya, general partnerships are governed by the Partnerships Act No. 16 of 2012. If the partners write no agreement, the Act supplies default rules, for example that profits are shared equally and that every partner has a say in management. Those defaults rarely match what the partners actually intended, which is why a written agreement is worth the effort. Kenya also recognises limited partnerships and limited liability partnerships (LLPs) under the same reform, and an LLP is a separate legal person that protects partners from personal liability for the firm's debts in a way a general partnership does not. This page is general information, not legal advice. Confirm the current position with a Kenyan advocate before you sign, especially on registration and liability. ## The local law that shapes the deal Registration of the business name. If the partnership trades under a name that is not simply the partners' own surnames, it must be registered under the Registration of Business Names Act (Cap. 499). Registration is handled by the Business Registration Service (BRS) through the eCitizen platform. Registering the business name is separate from writing the partnership agreement, and you generally need both. Liability. In a general partnership, partners are jointly and severally liable for the debts of the firm. That means a creditor can pursue any partner for the whole debt, not just that partner's share. If the partners want to limit this exposure, they should consider a limited liability partnership, which is a separate legal entity. Tax registration. The partnership and the partners need Kenya Revenue Authority (KRA) registration. A partnership files its own return, and partners are taxed on their shares. VAT registration is required once turnover crosses the threshold set by law. A county business permit is usually needed to trade. Default rules under the Act. Where the agreement is silent, the Partnerships Act fills the gap with equal profit sharing, equal management rights, and rules on how a partner may be expelled or how the partnership ends. A well drafted agreement overrides the defaults you do not want. ## A partnership agreement template you can adapt ```

PARTNERSHIP AGREEMENT This Agreement is made on [date] BETWEEN

1. [Partner name], of [address] (ID/passport [number])
2. [Partner name], of [address] (ID/passport [number]) [add more partners as needed] (together the "Partners") 1. NAME AND BUSINESS The Partners carry on business under the name [firm name], registered under the Registration of Business Names Act, in the business of [describe]. 2. PLACE AND TERM The principal place of business is [address]. The partnership begins on [date] and continues until ended under this Agreement. 3. CAPITAL CONTRIBUTIONS Each Partner contributes: [Name] KES [amount] [and/or assets], [Name] KES [amount]. Capital accounts are kept for each Partner. 4. PROFITS AND LOSSES Profits and losses are shared: [Name] [percentage], [Name] [percentage]. Drawings are limited to [amount or rule] per [month]. 5. MANAGEMENT AND DECISIONS Each Partner takes part in management. Day to day decisions are by majority. The following need unanimous consent: admitting a partner, borrowing above [amount], selling major assets, changing this Agreement. 6. BANKING AND ACCOUNTS The firm keeps a bank account requiring [number] signatures. Proper books are kept and accounts prepared at the end of each financial year. 7. ADMISSION AND RETIREMENT A new partner is admitted only by unanimous consent. A Partner may retire on [number] months written notice. A retiring or deceased Partner's share is valued under clause 9. 8. EXPULSION A Partner may be expelled by the others for [serious breach, insolvency, conduct harming the firm], by written notice. 9. VALUATION AND PAYMENT OF A SHARE An outgoing Partner's share is valued by [agreed accountant / formula] and paid over [period]. Goodwill is [included / excluded]. 10. DISSOLUTION On dissolution, assets are used first to pay debts, then to repay capital, then any surplus is shared in the profit sharing ratio. 11. DISPUTES AND GOVERNING LAW This Agreement is governed by the laws of Kenya. Disputes will first go to mediation, then to [arbitration in Nairobi / the courts of Kenya]. SIGNED by each Partner, before a witness: [Name] ____________ Witness ____________ [Name] ____________ Witness ____________

- Confusing capital contributions with profit shares, so the money is split the wrong way.
- No exit or valuation clause, which forces a dissolution when one partner wants out.
- No expulsion clause, leaving the firm unable to remove a partner who is harming it.
- Trading under a business name that was never registered under Cap. 499.
- Ignoring joint and several liability, when a limited liability partnership would have protected personal assets. ## Keeping the partnership's documents in one place A partnership agreement is the start of a paper trail, not the end. As partners join and leave, as profit ratios change, and as the firm registers for tax and permits, the agreement needs amendments, the capital accounts need updating, and the supporting documents need to stay consistent with each other. The work that lasts is keeping all of it aligned and knowing which version everyone actually signed. That is the same problem every growing business has with its contracts: drafting from a sound template, catching a clause that sits oddly against local law, editing a term cleanly across documents, and tracking the dates and versions that matter, all in one place. [Adira](https://adiralaw.com) is built around that single workspace idea, with the deepest coverage today for Indian corporate law and other jurisdictions being broadened. Kenya specific depth is on the roadmap rather than in place today, so for a Kenyan partnership use the template above and have a local advocate confirm it. The point worth taking is that a partnership runs more smoothly when its agreement, its accounts and its filings live together instead of scattered across the partners' laptops.