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Partnership Interest Purchase Agreement for the United Kingdom

Partnership Interest Purchase Agreement Template for England and Wales

A Partnership Interest Purchase Agreement is a legal document governed by English and Welsh law that formalizes the sale and transfer of an ownership interest in a partnership from one party to another. The agreement details the terms and conditions of the sale, including purchase price, representations and warranties, and completion mechanics. It ensures compliance with the Partnership Act 1890 and other relevant legislation while protecting the interests of all parties involved in the transaction.

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What is a Partnership Interest Purchase Agreement?

The Partnership Interest Purchase Agreement is used when a partner wishes to sell their stake in a partnership to either existing partners or third parties under English and Welsh law. This comprehensive document outlines the terms of the transfer, including valuation, payment terms, and any conditions precedent. It addresses crucial aspects such as ongoing liabilities, profit sharing, and partnership obligations. The agreement ensures compliance with partnership law while providing clarity and protection for all parties involved in the transaction.

What sections should be included in a Partnership Interest Purchase Agreement?

1. Parties: Identification of seller(s) and purchaser(s) of partnership interest

2. Background: Context of the transaction and partnership structure

3. Definitions: Key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including interest being sold and purchase price

5. Completion: Timing and mechanics of closing the transaction

6. Warranties: Seller's representations about the partnership interest

7. Confidentiality: Protection of sensitive information

8. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Partnership Interest Purchase Agreement?

1. Regulatory Approvals: Required when the partnership operates in a regulated industry requiring regulatory clearance for ownership changes

2. Tax Covenants: Specific tax-related promises and indemnities, used when tax liabilities are significant

3. Non-compete: Restrictions on seller's future activities to protect the partnership's business interests

What schedules should be included in a Partnership Interest Purchase Agreement?

1. Schedule 1 - Partnership Information: Details of partnership structure, assets, and material contracts

2. Schedule 2 - Warranties: Comprehensive list of warranties given by the seller regarding the partnership interest

3. Schedule 3 - Completion Requirements: Detailed list of documents and actions required at completion

4. Schedule 4 - Tax Covenant: Detailed tax-related provisions, indemnities, and allocation of tax liabilities

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions








































Clauses



































Industries

Partnership Act 1890: Fundamental legislation that defines partnerships, establishes basic partnership rights, governs relationships between partners, and sets out rules for partnership dissolution

Limited Partnerships Act 1907: Provides specific provisions for limited partnerships and defines the rights and obligations of limited partners

Companies Act 2006: Relevant when partnership has corporate partners, covering corporate governance and filing requirements

Income Tax Act 2007: Key tax legislation governing income tax treatment of partnership interests and distributions

Corporation Tax Act 2010: Governs corporation tax implications for partnerships, especially relevant for corporate partners

Taxation of Chargeable Gains Act 1992: Covers capital gains implications of partnership interest transfers and tax treatment of partnership distributions

Financial Services and Markets Act 2000: Applicable if the partnership operates in regulated financial services sectors

Money Laundering Regulations 2017: Anti-money laundering requirements that may affect partnership interest transfers

Common Law Contract Principles: Fundamental contract law principles from case law that govern agreement formation and enforcement

Law of Property Act 1925: Relevant when partnership involves real property interests

FCA Regulations: Financial Conduct Authority regulations applicable to regulated partnerships

Competition Law: Requirements ensuring partnership arrangements don't violate competition regulations

Data Protection Act 2018: UK implementation of GDPR, governing handling of personal data in partnership operations and transfers

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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