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Partnership Settlement Agreement for Hong Kong

Partnership Settlement Agreement Template for Hong Kong

A comprehensive legal agreement governed by Hong Kong law that formally documents the terms and conditions for dissolving or restructuring a partnership arrangement. This agreement sets out the complete settlement terms between partners, including asset distribution, liability allocation, financial settlements, and mutual releases. It addresses key aspects such as client transition, confidentiality obligations, and post-dissolution restrictions while ensuring compliance with Hong Kong's Partnership Ordinance and related legislation. The document serves as a definitive record of the partners' agreement to terminate their business relationship and provides a framework for implementing the agreed settlement terms.

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What is a Partnership Settlement Agreement?

The Partnership Settlement Agreement is a crucial document used when partners decide to terminate or substantially restructure their business relationship in Hong Kong. It is particularly important for professional partnerships, family businesses, and joint ventures operating under Hong Kong law. The agreement comes into play during various scenarios including retirement of partners, voluntary dissolution, or resolution of partnership disputes. It must comply with the Hong Kong Partnership Ordinance and other relevant legislation while addressing complex issues such as asset division, client retention, ongoing liabilities, and tax implications. The document typically includes detailed provisions for financial settlements, asset distribution, release of claims, and post-dissolution obligations. It serves both as a settlement instrument and a risk management tool by providing clarity and finality to the partnership dissolution process.

What sections should be included in a Partnership Settlement Agreement?

1. Parties: Identification of all partners and any other relevant parties to the settlement agreement

2. Background: Recitals explaining the partnership's history, reason for dissolution, and context for the settlement

3. Definitions: Definitions of key terms used throughout the agreement

4. Interpretation: Rules for interpreting the agreement, including construction of references and calculations

5. Acknowledgment of Dissolution: Formal acknowledgment of the partnership's dissolution and effective date

6. Settlement Terms: Core terms of the settlement including financial arrangements and asset distribution

7. Release and Waiver: Mutual release of claims and waiver of rights between the parties

8. Tax Matters: Allocation of tax liabilities and responsibilities

9. Further Assurance: Obligations to execute further documents and take necessary actions to implement the settlement

10. Governing Law and Jurisdiction: Specification of Hong Kong law as governing law and jurisdiction for disputes

11. Execution: Signature blocks and execution requirements

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

1. Non-Compete and Non-Solicitation: Restrictions on future business activities and client solicitation, if agreed between parties

2. Confidentiality: Obligations regarding confidential information, typically included if sensitive business information is involved

3. Ongoing Obligations: Any continuing duties or responsibilities of the parties post-dissolution

4. Intellectual Property Rights: Allocation of IP rights if the partnership owned or developed intellectual property

5. Third Party Rights: Provisions regarding the rights of third parties under the Contracts (Rights of Third Parties) Ordinance

6. Insurance and Indemnification: Provisions for maintaining insurance coverage and indemnification obligations

7. Dispute Resolution: Detailed procedures for resolving disputes, including mediation or arbitration provisions

8. Public Announcements: Requirements for making public statements about the dissolution and settlement

What schedules should be included in a Partnership Settlement Agreement?

1. Schedule 1 - Asset Distribution: Detailed listing of partnership assets and their agreed distribution

2. Schedule 2 - Financial Settlement: Detailed breakdown of financial settlements including payments and adjustments

3. Schedule 3 - Outstanding Liabilities: List of partnership liabilities and their allocation between partners

4. Schedule 4 - Client List: Distribution or handling of client relationships and ongoing matters

5. Schedule 5 - Completion Actions: List of actions required to be taken by each party to complete the settlement

6. Appendix A - Partnership Agreement: Copy of the original partnership agreement being terminated

7. Appendix B - Valuation Reports: Any relevant valuation reports for partnership assets

8. Appendix C - Tax Calculations: Detailed tax calculations and allocations

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

Hong Kong

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions










Clauses




































Relevant Industries

Professional Services

Legal Services

Accounting & Audit

Medical Practices

Architecture & Design

Management Consulting

Real Estate

Financial Services

Engineering Services

Information Technology

Creative Industries

Trading & Distribution

Construction

Healthcare Services

Relevant Teams

Legal

Finance

Compliance

Risk Management

Operations

Business Development

Human Resources

Administration

Corporate Secretarial

Tax

Audit

Partnership Management

Executive Leadership

Relevant Roles

Managing Partner

Senior Partner

Executive Partner

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Legal Counsel

Company Secretary

Finance Director

Operations Director

Managing Director

Business Development Director

Risk Manager

Compliance Officer

Partnership Administrator

Professional Partner

Equity Partner

Junior Partner

Industries







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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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