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Partnership Redemption Agreement for the United Kingdom

Partnership Redemption Agreement Template for England and Wales

A Partnership Redemption Agreement under English and Welsh law is a legally binding document that governs the process of one or more partners exiting a partnership through the redemption of their partnership interest. The agreement details the terms of the redemption, including valuation methods, payment terms, and ongoing obligations. It ensures compliance with the Partnership Act 1890 and other relevant legislation while protecting the interests of both the departing and remaining partners.

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What is a Partnership Redemption Agreement?

A Partnership Redemption Agreement is essential when a partner wishes to exit a partnership or when the partnership wishes to buy out a partner's interest. This document, governed by English and Welsh law, sets out the complete terms of the redemption, including valuation methodology, payment structure, warranties, and any continuing obligations. It ensures compliance with the Partnership Act 1890 and provides certainty for all parties involved. The agreement is particularly important for managing partner transitions while maintaining business continuity and protecting the interests of all parties involved.

What sections should be included in a Partnership Redemption Agreement?

1. Parties: Identification of all parties to the agreement

2. Background: Context of the partnership and reason for redemption

3. Definitions: Key terms used throughout the agreement

4. Redemption Terms: Details of the partnership interest being redeemed

5. Purchase Price: Valuation and payment terms

6. Completion Requirements: Actions required to complete the redemption

7. Warranties and Representations: Standard warranties from both parties

What sections are optional to include in a Partnership Redemption Agreement?

1. Tax Provisions: Specific tax arrangements and allocations - used when complex tax implications exist

2. Non-Compete Provisions: Restrictions on departing partner - used when protecting business interests is crucial

3. Staged Payments: Schedule of multiple payment installments - used when payment is not made in single sum

What schedules should be included in a Partnership Redemption Agreement?

1. Schedule 1: Partnership Interest Details: Detailed description of the interest being redeemed

2. Schedule 2: Valuation Method: Agreed methodology for valuing the partnership interest

3. Schedule 3: Outstanding Obligations: List of any continuing obligations or liabilities

4. Appendix A: Required Notices: Forms of notices required under the agreement

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: Foundational legislation that defines partnerships, establishes basic partnership rights, sets out default rules for partner relationships, and governs partnership dissolution procedures

Limited Partnerships Act 1907: Specific legislation governing limited partnerships, relevant if the partnership structure includes limited partners with limited liability

Companies Act 2006: Relevant legislation when the partnership involves corporate partners or corporate entities

Income Tax Act 2007: Tax legislation covering the tax implications of partnership interests and the treatment of redemption payments

Taxation of Chargeable Gains Act 1992: Legislation governing capital gains tax implications arising from the disposal of partnership interests

Contract Law principles: Common law principles governing contract formation including offer, acceptance, consideration, and intention to create legal relations

Financial Services and Markets Act 2000: Regulatory framework applicable when the partnership engages in regulated financial activities

Law of Property Act 1925: Legislation relevant for partnerships holding or dealing with real property assets

Insolvency Act 1986: Legal framework governing partner insolvency situations and related procedures

Partnership (Accounts) Regulations 2008: Regulations setting out the financial reporting requirements for partnerships

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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